Point of Order

John Randall: On a point of order, Madam Deputy Speaker. As I was coming to the House this morning, I was listening to the "Today" programme, as is my wont, and I heard that the Secretary of State for Children, Schools and Families was announcing outside the House a very important new policy on A-levels and supplementary matters. He even thought that Mr. John Humphrys would need at least an hour to have them explained to him. When I came to the House, I looked in vain at the written statements on the Order Paper and found no such written statement on the matter.
	Only yesterday, during business questions, as reported at column 1915 of the  Official Report, the Leader of the House said that, if there was a change of policy, it would require a statement in the House. This is a change of policy. I wonder whether you have had any representations from either the Secretary of State or, indeed, the Leader of the House to explain why this gross discourtesy has taken place.

Madam Deputy Speaker: I have not been advised that any Minister wishes to make such a statement to the House, but I have no doubt that Mr. Speaker will look into the matter raised by the hon. Gentleman.

Andrew Miller: I beg to move, That the House do sit in private.
	 Question put forthwith, pursuant to Standing Order No. 163 (motions to sit in private):—
	 The House proceeded to a Division.

Madam Deputy Speaker: I ask the Serjeant at Arms to investigate the delay in the No Lobby.

The House having divided: Ayes 0, Noes 38.

Question accordingly negatived.

Orders of the Day

Private Equity (Transfer of Undertakings and Protection of Employment) Bill

Order for Second Reading read.

John Heppell: I beg to move, That the Bill be now read a Second time.
	A couple of months ago, when I first embarked on this process, I was fairly clear that I knew very little about private equity takeovers or the Transfer of Undertakings (Protection of Employment) Regulations 1981; now, however, having spent a few months going through it all, I am certain that I know very little about them. I found most of the language, and most of the drafting of the Bill, very confusing. I need notes on the explanatory notes. It is a lot more complex than I believed it would be. I therefore approached it not as any kind of expert, but in a common-sense way by looking at the problem and, without going into the legalistic jargon, trying to understand how ordinary people would see it.
	This all started because I thought that I had identified an anomaly in the law, and I still think so. When a company is taken over, TUPE applies, which means not only that the workers have protection but that the business has protection. People forget this, but TUPE is not just about the protection of workers' rights; it is also intended to ensure that there is proper competition, so it protects business as well as workers. Under a normal takeover, business and employees are allowed that protection, but when it is done through a transfer of equity—a transfer of shares that gives a controlling interest—for some reason they are not allowed the same protection. It seemed to me that there was an easy way around that—all I needed was a very simple Bill that would allow the TUPE rules to apply to people in those circumstances.

James Duddridge: The hon. Gentleman's modesty is admirable, but he is bringing to this House a Bill that asks us to change legislation. Private equity is quite a complicated beast, and it means different things to different people. Can he say from the outset which definition of private equity he is using? I do not see one in his Bill; nor do I see a common understanding of what private equity is in the marketplace.

John Heppell: I do not want to get bogged down in the legal niceties of these things. Let me freely admit from the beginning that, because of the time that I had to get the Bill drafted and published, I have made mistakes. I want to explain the issue in detail first, but I will come to the hon. Gentleman's point later on.
	Initially I went to people and said, "Why can't we do this?", and the answer I got was fairly straightforward: "When you have a share transfer you don't have a change of ownership, and so it's not necessary. We don't do TUPE in those circumstances." One of the people who has been helping me to put the Bill together—I will not mention his name, because it might embarrass him, but for the sake of debate we will call him Jack Dromey—said to me: "But why not?", and that has stayed with me ever since. Whenever people say, "We don't do that", my response is, "Why not?" If it is a good idea to apply the same rules to these people, why do we not do it?
	When I have spoken to people about this, it has been very much a case of shifting sands, as the arguments as to "Why not?" have changed. Two reasons for not making the change were put forward: first, that it was not necessary because people were already protected under other legislation; and secondly, that it would be burdensome for business. I thought, "Those are both good reasons, but hold on a minute—you can't have both of them, because one cancels out the other." If the workers have these protections and all the rights that they enjoy under TUPE anyway, and there is no problem with that, how is it burdensome to ask that that be written in law and carried out? The two arguments did not balance, and I still do not accept them.
	The principle that I have started to understand is that when there is a private equity takeover or a transfer of shares that gives a controlling interest, that means, by its very nature, that the workers in those undertakings will be faced with significant change in which they will not have the same protection as they would under another kind of transfer. Their terms and conditions are not subject to the same protection, and their rights to consultation are not the same. We have to move towards dealing with that.

Tony Lloyd: My hon. Friend is making an interesting point. One of the great disadvantages of TUPE, where it applies, is the fact that there is enormous uncertainty for the work force during the period of the takeover, or the change of equity owner in the circumstances that he describes. What does he make of the report in this morning's  Financial Times that the CBI says that one of the reasons for not making this change is that it would increase uncertainty for companies? Would it not in fact give them greater certainty?

John Heppell: That is true; I agree with my hon. Friend. People forget that a lot of the drive to make it clear where TUPE should apply has come not from trade unions or employees but from business—that has been evident from the time of the acquired rights directive right up until the latest negotiations in 2006. Business itself was saying, "Let us be clear as to where TUPE should apply", because it knows that it cannot have competitive fairness if someone can undercut it by short-changing their staff on terms and conditions, salaries and so on. Doing something about this would create a situation where there is less uncertainty. I tried to make that point over and again. TUPE should not be seen as a burden; it is a benefit both to employer and employee.

Nigel Evans: My point follows on from the question asked by the hon. Member for Manchester, Central (Tony Lloyd) about the CBI. In the other place, we have one of the Ministers of all the talents, Lord Digby Jones, who used to be the top cheese in the CBI. When the hon. Member for Nottingham, East (Mr. Heppell) was devising his Bill, did he consult Lord Jones to find out his views about it?

John Heppell: No, I did not, but I consulted other people. I have not simply sat down with trade union colleagues and devised a Bill. We have had discussions. This is a good moment to pay tribute to my hon. Friend the Minister for Employment Relations and Postal Affairs, his Department and his officials, who have been willing to listen to me and advise me about the Bill. I pay tribute to them for the chance to have that dialogue. There is a problem and, at last, people are identifying that there is a problem.
	I know that there are technical difficulties in the Bill. I was trying to say before that my original intention was to give the workers in question no more rights than any others. It was not a case of giving them something special; I just wanted them to have the same as everyone else. The trade unions and others have said to me, "Why don't you use this opportunity to strengthen TUPE and give people more rights?" My response has been, "That is not what the Bill is about." I am trying to give existing rights, which are enjoyed by some workers, to other workers. If some workers enjoy rights that certain others do not, there is an anomaly. There is something wrong there, and there has to be a way of putting it right.

David Kidney: I am following my hon. Friend's speech with interest. On the point he just made, do we not stand on the brink of a new wave of sovereign wealth funds introducing new owners to businesses and new employers into this country? Would it not be wrong if, faced with the decision of how to invest in this country, they said, "If we buy the company, we must consult and give information to the employees, who are protected from unfair dismissal, but if we buy the shares, they won't have those protections"? Is that not his point?

John Heppell: That is exactly the point. Anyone using common sense can see that that is the case. I have talked to lots of lawyers, and gone round in circuitous arguments, but to me the matter is straightforward. All companies should have the same protections, as should all workers. It is a question of fairness and of balance, and that is what I want to achieve. As I was about to explain to the hon. Member for Ribble Valley (Mr. Evans), I have not just discussed matters with the Department, but I thank the Minister for the time and effort that he has put into talking to me about the Bill.
	I also thank the British Private Equity and Venture Capital Association, the BVCA. I have met people there; the meetings were confidential, so I will not divulge what was said, but some of the things that they told me were very helpful. In fact, they identified straight away one area where I had gone beyond TUPE, and was bringing in something new. I had not realised initially that there was something concerning an injunction in my Bill. I would want to take that out; I do not want any extra rights for the people in question. I want existing rights to apply to all workers—not something new, but something that already exists.

Philip Davies: The hon. Gentleman mentioned that he met the BVCA, and said that his discussions were confidential. Will he confirm that, even given the changes he wants to make, it is still opposed to his Bill?

John Heppell: The message I got from the BVCA was that it would leave the working on the matter to the CBI. My suspicion is that it will follow the CBI's position, which at present is to oppose my Bill. I hope to change the Bill in Committee so that it can attract a bigger consensus. I am not ruling anything out. All I want to do is find the right mechanism, or vehicle, to take further an issue that should be dealt with.

Christopher Chope: Surely the first point is to discuss to whom the Bill applies. The long title of the Bill refers to "private equity companies". Normally, we know what we are talking about when legislating, because it is defined in the Bill, but the phrase "private equity companies" is not defined in this Bill. We have not even passed the first hurdle: knowing to which group of companies the legislation would apply.

John Heppell: I agree with the hon. Gentleman completely. The problem is that I had to put a long title to the Bill when I started. Initially, I thought that the Bill would deal just with private equity companies, but I realised that the issue went beyond those companies. I tried to take out the title and put in something new, but as the hon. Gentleman knows, I cannot do that until I get into Committee. I wanted to change the title to the "Transfer of Equity (Protection of Employment) Bill", but because I had set out the title already, I could not change it. There are other things that I want to change, but I cannot change any of them until I get into Committee.
	I am a realist; I recognise that I need to change the Bill significantly enough in Committee to satisfy the Minister, the Department and a section of the business community. I do not think that I am going to convince everybody. Some people are against any form of regulation—I am not going to convince them. However, there are people in the industry who are involved with such takeovers who will back legislation along these lines. I say again, this Bill is not an attack on private equity. I want to make that really clear. I have had help from people in the industry, who have told me what is wrong with my Bill.

Nigel Evans: During the Division earlier, the Minister said to me, "Are you here every Friday?" I could have asked the same question of him, because he is in his usual place. Of all the discussions that the hon. Member for Nottingham, East has had with people—he said that he has spoken to civil servants in the Department—I assume that they include speaking to the Minister. Can he say whether the Government are supporting the Bill?

John Heppell: I think that I had better leave that to the Minister. I am sure that I am being so persuasive that his mind is changing at this very moment. I am convinced that he will come on board.

Paul Farrelly: I congratulate my hon. Friend on introducing this Bill. Generous as he has been to private equity, in stressing that his Bill is not an attack on it, does he agree that a lot of myths have grown about private equity—its glamour, and the allegation that it is a source of employment in the City? In some circles, there is even the idea of a Faustian pact that allows such companies to keep their tax advantages. The vast majority of economic studies show, however, that most mergers and takeovers fail because a lot are prompted by motives of management aggrandisement and by private equity partner greed. Does he therefore agree that mergers and takeovers that take such a short-term view, and that undermine investment and the loyalty and skills of work forces, are not helpful to British industry?

John Heppell: That is what I was trying to say. I do not want to make judgments. I have examples of private equity takeovers that were bad—bad for the work force, and badly handled. People in the work force have been left in the dark with no idea what is happening until their redundancy notice dropped through the letterbox. That sort of thing should not happen. However, I could give lots of good examples, where, to be honest, if a private equity company had not taken over a business, it would have gone bust, and workers would have ended up on the dole. There is a wide range of takeovers; some are good and some are bad.
	Indeed, private equity companies recognise that. Only last year, they brought in their own code of practice, setting out the things that should properly be done, such as consulting the new work force and protecting people's terms and conditions. They have that voluntary code, but I want it to be made law. Voluntary codes are great for all of those who are prepared to stick by the rules, but they do not work for those who are not prepared to do that. I want to put some power behind the voluntary code that the industry has devised.
	I do not want to put an end to private equity or private equity takeovers. That is the not the purpose of the Bill. All I want is for people to recognise that private equity takeovers exist. They are a real thing, but people act as if they do not exist—that, somehow, private equity takeovers are imaginary and the rules do not apply to them.

Christopher Chope: The hon. Gentleman cannot even tell the House what a private equity takeover is. That is the problem, is it not?

John Heppell: I think that there is a definition in the explanatory notes to the Bill, so I will ensure that the hon. Gentleman has a copy. However, the definition is not of "private equity"—as I said, I wanted to change the title altogether—so I recognise what he says. It is difficult for him and others to make a judgment except about what is in the Bill. I am trying to talk about what my intentions were, rather than the impression that I might be giving the hon. Gentleman from the Bill.
	I have lost my train of thought again.

Philip Davies: To help the hon. Gentleman get his train of thought back, his Bill says that it would apply to "substantial" share ownership. However, a 1 per cent. holding in BP, for example, might be considered substantial because of the sums involved, whereas a 1 per cent. holding in a small firm might be tiny, so could he say what "substantial shareholdings" means?

John Heppell: It means a controlling shareholding, where someone takes control of a company. It is not too difficult to spot when that is happening, and people know about it. Again, there is a definition in my explanatory notes, but it is in lawyers' words. I cannot pretend that I even understand it. It is the old thing—I am talking about things that I know, but which I do not have the legalistic jargon to go through. However, people know when something is happening. Let us be clear: we know what is happening when there is a takeover.
	Certainly the workers know—or rather, the workers do not know, and that is the real problem. Why should workers not have a right to know what is going on when there is a takeover? The first of the three distinct things in the Bill is a requirement to consult and inform employee representatives. What is wrong with that? The Department will tell me, "Well, they have a right to consultation anyway—that's covered by other legislation." That is not quite accurate, however. The workers have a right to consultation when a certain percentage of them ask for it, but really, that happens after the event. TUPE gives people an automatic right for that happen. If that right is automatic under TUPE, why should it not be automatic under the takeovers that I am talking about, too?
	The next thing that the Bill would do is give protection to workers' contracts of employment and their employment rights, where they are employed in an undertaking or business immediately before control is transferred. That would include trade union recognition.

Lorely Burt: I am a little confused, because as I understand it, all the rights to which the hon. Gentleman is referring are automatically conveyed on the employees of a company that is subject to a share takeover by virtue of existing legislation. I am struggling to understand the need for additional legislation when all those rights still apply.

John Heppell: It is because the situation for workers is different when there is a transfer. When a company is taken over, we are talking about not just the contract being broken, but the transfer itself. Workers would still have rights, but they would not have the same rights as under TUPE. There are differences.
	People are wrong: when somebody takes over a company, for example, TUPE does not mean that workers cannot be dismissed or made redundant. They can be made redundant. There is nothing stopping that, but that has to be shown not to be an arbitrary decision as a result of a takeover. It has to be shown—I forget exactly—that there are economic, technical or operational reasons. The same would apply under the Bill. Again, I am not talking about something draconian; I am talking about things that happen now, under TUPE. I want the same things to apply.

Jonathan Djanogly: Surely the same statutory provisions would apply in respect of any redundancy programme put in place after a share acquisition.

John Heppell: I have lost the point on that.

Jonathan Djanogly: The point is that the existing law provides no less protection for workers made redundant after a share sale.

John Heppell: No, it does not. The reality is that Joe or Josephine on the shop floor knows that they are being taken over. Let us be right about this: when private equity companies take over a company, it is because they have a plan to change things. They might be coming in with new investment, but they will want to change how the company is run. A takeover has significant consequences for the work force. When that transfer does not take place, people do not face those consequences.

Jonathan Djanogly: I am sorry, but how can the hon. Gentleman assume that there will be considerable consequences for the employees following a takeover? There might be, but there might not be.

John Heppell: How can I be sure that there will be any changes under any takeover? Of course, I cannot be sure. All I can say is that I have eyes in my head and ears stuck on the side of my head, and all my experience of takeovers shows me that in every instance there are significant consequences for those who are employed in those companies. We do not have to be geniuses to recognise that.

Tony Lloyd: Except in relation to the beauty of my hon. Friend's ears, the point is quite trivial. If there is to be no change, the new operator informing the employees of that will impose no cost on the company, so what is the problem?

John Heppell: That is the argument that I started with. We cannot have it both ways. If someone says, "They're already protected and these things are all going to happen automatically anyway, so there'll be no difference for the employee", there is no great problem with the legislation, so how can it be burdensome and problematic? We cannot have it both ways.

Christopher Chope: Would the legislation have applied in the case of the takeover of Northern Rock? In supplementing that question, may I tell the hon. Gentleman that I have just been into the Vote Office to inquire as to the whereabouts of the explanatory notes to which he referred in answer to my last intervention, but explanatory notes there were none.

John Heppell: I apologise to the hon. Gentleman; I have not made them available. I will try to get a copy to him before the debate has finished. I have not put the explanatory notes in the Vote Office. Again, that is because these things happen with a great deal of haste and because it is not always that easy to get things published in time, but I will get a copy to him before the end of this debate.

Christopher Chope: And Northern Rock?

John Heppell: To be honest, I am no great expert on Northern Rock and I am not really sure.

Tom Clarke: It was a hypothetical question.

John Heppell: I do not mind hypothetical questions. What I would say is that I am sure that if the legislation applied, Her Majesty's Government would comply in full and ensure that people were informed about the rights of the work force. I do not think that that would be a problem.

David Kidney: First, the existing regulations would apply to Northern Rock, because there is a transfer of ownership from the private owner to the Government through nationalisation. On the more general question about the point of the proposals and whether the existing regulations would apply, about which two hon. Members have asked my hon. Friend in interventions, I refer him and them to Library research paper No. 23, which says:
	"It is fairly clear that when one company sells a business to another as a going concern, TUPE does apply."
	However, it continues:
	"TUPE does not apply to transfers of shares".
	That is the point of my hon. Friend's Bill.

John Heppell: I agree completely. I think that those Members were arguing that legislation other than TUPE would apply and give people protection. I agree that there is other such legislation; it does not, however, give the same protection as TUPE does. That is the point. Why should one set of workers' protection be inferior to that of another set of workers in a very similar situation—not exactly the same, but very similar?

Lorely Burt: I thank the hon. Gentleman for giving way; he is being patient. He is saying that the TUPE regulations are not to be altered in any way, shape or form. From briefings that I have received from the CBI, I understand that it believes that the regulations are indeed changed and that all such business—whether a share takeover or the transfer of a business to another owner—would be disadvantaged. That is one of the CBI's core problems. For example, a potential injunction is allowed to be taken out pending a share sale, and the CBI fears that that could delay and disadvantage any acquisition or merger about to take place. Will the hon. Gentleman confirm or deny that?

John Heppell: The hon. Lady has made a valid point, and it was something that I said earlier. I am not trying to blame the people who helped me to draft the Bill, but the difficulty is that it is hard to keep track of how these things are going down. My original intention and stated position was to try to ensure that people had TUPE and nothing more.
	As I said earlier, that other issue was identified in discussions that I have had. Hon. Members have my undertaking, given on the Floor of the House, that a provision leading to rights beyond those given by TUPE would certainly be removed in Committee. My intention will be to try to apply TUPE and nothing else—I want no extra rights for people and no burdens. It is no use to me or anyone else if unnecessary burdens are put on business. I recognise that there has to be a balance; I just think that it is tipped slightly the wrong way in respect of these particular takeovers.

Nigel Evans: I accept that the hon. Gentleman does not want to do anything that will hit business in this country and that his Bill is well intentioned. Of course, the most dangerous legislation is well intended but passed without consideration of unintended consequences. What does the hon. Gentleman believe the unintended consequences of his Bill could be? We want equal rights for workers, but we operate in a global world. Do our European Union neighbours, the United States of America, Australia and Canada have legislation similar to what he is trying to pass through the House today?

John Heppell: I am not aware of the legislation in every country, but I know that some countries' legislation is somewhat stronger than mine. I would not want to go down that route. I want a light finger and a light touch in this legislation; that is why I want only TUPE to be applied. The arguments would be terrible. What about ordinary takeovers? When businesses carry out a takeover, do they say, "Oh my God—we could not manage this because of TUPE"? No, they do not, because when the rules are applied properly, people do only the things that they should be doing. The Walker guidelines for private equity companies show the things that companies should be doing. I am saying that that needs some backing in law.

Dennis Skinner: When we discussed the TUPE ideas many years ago, when there was a Tory Government and there were all sorts of privatisations and so on, there is no doubt that the net result was that most workers felt that they at least had a say in what happened when a takeover took place. However, there is no doubt that now there is a gap in the market. Since the private equity people have come in, there has been danger.
	Perhaps the most startling example of what I mean was one of the early ones. Private equity people moved into the Automobile Association and changed its whole dynamic. That resulted not only in a third of workers losing their jobs, but in the organisation becoming more of a franchise than it had been hitherto. That is a startling example. There is no doubt at all that a gap is growing in the market. That is why my hon. Friend is right to introduce this Bill—on a Friday; usually such Bills are discussed and Governments do not take action. But one thing is certain: the Government have to step in at some point.

John Heppell: I agree with my hon. Friend. I am a realist about these things; I recognise that if my Bill gets to Committee, it will be difficult for it to come out if I have not managed to satisfy the Government and others that it is a suitable vehicle. If I were a betting man, and I am not, I would put odds on my Bill probably not surviving. However, I predict that in the next two or three years the Government will have done something along the lines set out by the Bill because not only employees but employers will demand it.

Nigel Evans: I am not a fan of the European Union by any stretch of the imagination—quite the opposite—but we were talking about industry last week and I recognise that the European Union may wish to try to bring something forward under which every EU country will do what we have been discussing to the same degree and strength, so that none has an unfair advantage. I prefer the flexibility, however. Has the hon. Gentleman been given any indication that the European Union is interested in legislating on this issue?

John Heppell: I suspect that the European Union is often interested in legislating. A fortnight ago, we were discussing another Bill and a similar point came up. Sometimes, we need to make sure that we attach importance to the sovereignty of this country and that we make rules if there is a need for them. I would not want a rule that disadvantaged us in the international markets, but I do not think that the Bill would.
	The private equity and venture capital industry itself will come to recognise this point. Last year, it made pronouncements about the need for much greater transparency in takeovers, especially for the work force. I cannot believe that the industry made such statements without recognising that people would want to see the action—to see that there was consultation with the work force during takeovers and that people were not kept in the dark about what was happening until decisions were made and it was too late for them to be involved.
	Good employers always recognise that it is a good idea to consult the work force, because they might have a good idea about what to do instead. I know that people think that consultation is negotiation, but it is not—it means that employers tell people what they are going to do and give them the chance to talk back. However, the employers still make the decisions. That is what the Bill is about; it tries not to fetter the industry but to make sure that there is transparency and that the work force are informed and involved.

Tony Lloyd: My hon. Friend's most recent exchange has raised an important point. As he says, his ambition is to do no more than give employees the right to be consulted. That is not a huge right; in fact, Conservative Governments have granted such rights in the recognition that they are right and just.
	Earlier, my hon. Friend the Member for Stafford (Mr. Kidney) raised the role of sovereign wealth funds. The ambitions and motivations of such funds may be very different from those of traditional equity purchases. There might be more consensus across the House than Conservative Members believe at the moment. A minimum right to consultation for employees might be an important beginning of some form of protection against the denuding of British industry by rampaging sovereign wealth funds from abroad.

John Heppell: I agree completely with my hon. Friend.  [Interruption.] I have just realised that I have found a copy of the explanatory notes for my Bill; if somebody did not mind making a copy, I would happily pass it on to the hon. Member for Christchurch (Mr. Chope).
	I started out by spelling out simply what I thought the problem was. Certain workers are not protected by TUPE regulations, but they should be. To those who ask why, I say, "Why not?" The hon. Member for Ribble Valley (Mr. Evans) mentioned unforeseen consequences. I remember having conversations with lots of people very early on. I asked them what drastic consequences there would be if the Bill went through. Almost no one I spoke to suggested any.
	Let us be clear: I am a serial loyalist. I would not want to put the Government in a position in which there would be drastic consequences. I would not want to put private equity firms in such a position. I envisage no drastic consequences from the proposal. The current Bill might contain some drastic things, which I want to remove—as I have said, I will take them out. I do not expect any unforeseen drastic consequences. I can see only good coming from the proposal.
	I end as I began. I am grateful to the Minister and the Department for entering into dialogue with me about the Bill. I am grateful to the BVCA and the venture capital people for entering into dialogue. At last, it is starting to be commonly accepted that there is an issue. Private equity takeovers are here to stay, and we cannot allow workers in such transfers to be in a different position from workers in non-private equity takeovers. We must have some mechanism to rectify that. It will not be the end of the matter when the Bill goes into Committee. I want to pare down the Bill to the point at which we might get consensus in the industry and among employees.
	I hope that hon. Members will approve the Second Reading of the Bill and allow me to take it into Committee and take the issue forward.

Philip Davies: I congratulate the hon. Member for Nottingham, East (Mr. Heppell) on bringing forward his Bill and on his success in the ballot. I have never had the opportunity to introduce a private Member's Bill. When I have such an opportunity, I hope that I can take it up with the same humility and panache that he displayed. He was disarmingly frank in saying that he is not a world-leading authority on private equity. That admission did him a lot of credit, and I will certainly not claim to be such an authority either. Over the past few days, I have rapidly tried to learn more about the subject.
	The hon. Gentleman made it clear at the start that he has no intention to introduce any unnecessary burdens on business or to do any harm to the economy, and I accept, as my hon. Friend the Member for Ribble Valley (Mr. Evans) did, that he brings forward his Bill with the best of intentions. My quibble with him relates to the outcome or potential outcome of the Bill, not to his motivations. He said that he wanted to protect the rights of workers, which is a perfectly honourable and laudable aim. But my view is that the most important right of a worker is to have work, and my chief concern about the Bill is that fewer people would be in work as a result of it than are in work currently.
	Sir Alfred Sherman, a great hero of mine who unfortunately died in 2006, referred in one of his books to politicians making proposals that were "painless panaceas". I fear that the Bill is an attempt to introduce yet another painless panacea—the view that irrespective of the additional burdens that we keep putting on business, we can have as many jobs as we currently have and perhaps even more. Such painless panaceas do not exist.

Nigel Evans: I agree with my hon. Friend that painless panaceas do not exist; if only they did. We have put several questions to the hon. Member for Nottingham, East to try to find out exactly the direction of the Bill. As I told him, I totally support giving protection, and equality of protection, to workers in this country. On several occasions, however, he was not certain whether such legislation existed in other countries or whether the EU was trying to introduce it. Perhaps private Members' Bills should have a pre-legislative stage so that hon. Members who are interested can seek out the answers to such questions before Second Reading. Other than perhaps my hon. Friend the Member for Huntingdon (Mr. Djanogly), none of us is an expert, and such a pre-legislative stage would enable us to get those answers in advance.

Philip Davies: My hon. Friend raises a valid point, and I am sure that what he describes would make us all better off. If every other country in the world were taking the same route, the proposal might have more merit, because British businesses would not be put at a potential disadvantage. I have always been a fan of multilateral rather than unilateral action. Labour Members might argue that if we took the lead and introduced such a proposal, every other country might follow. I have never been particularly taken with that argument. It was, of course, the argument used by CND in the 1980s—that if we got rid of all our nuclear weapons, everyone else would follow suit. I was never persuaded by that argument then, and I am not particularly persuaded that if we were to have an avalanche of workers' rights, every other country in the world would automatically follow suit. I suspect that most other countries would say, "What a set of fools you have been. We will now exploit the competitive advantage you have just handed us." I therefore agree with the thrust of my hon. Friend's point.

Christopher Chope: Does my hon. Friend accept that one problem today is the Government's failure to respond to the Treasury Committee's report last July, paragraph 81 of which called on the Government to clarify the application of TUPE in the sort of situations discussed by the hon. Member for Nottingham, East in introducing his Bill? As a result, we are in the dark when discussing the matter today.

Philip Davies: My hon. Friend makes a good point. My understanding is exactly the same as his. No doubt the Minister will be able to shed some light on that issue. My hon. Friend also makes the valid point—my hon. Friend the Member for Ribble Valley touched on it as well—that we are slightly in the dark on this matter. I am well aware that the hon. Member for Nottingham, East has some explanatory notes, but like my hon. Friend the Member for Christchurch (Mr. Chope), I have not had access to them. On some matters, I might therefore seek clarification that has been provided in the explanatory notes, but which I would not be aware of.

John Heppell: I accept that the hon. Gentleman feels that he is very much in the dark about the Government's response to the Treasury Committee report and the law on the matter generally. How does he think that workers feel about being in a far worse position, when in the process of being taken over by one of the companies under discussion? Does he not think that they might feel that they are in the dark as well?

Philip Davies: The hon. Gentleman is right that workers are often in the dark. I was working for Asda when it was taken over by Wal-Mart. Inevitably, because of market sensitivities, we were in the dark to a certain extent about what was happening, but we were pleased that we would retain our jobs and that the company would survive and flourish as a result of the takeover. Being kept in the dark is a minor issue compared with having one's company safeguarded.
	We ought to touch on the importance of the private equity and venture capital industry to the UK economy. It is estimated that in the last financial year, 2006-07, private equity-backed companies generated total sales of £310 billion, provided exports of £60 billion and contributed almost £35 billion in taxes to the British economy. That tax bill alone equates to the salaries of all nurses, ambulance staff and police officers throughout the United Kingdom. Private equity firms are therefore making a massive contribution to the UK economy, as well as to the public services that their taxes provide. Currently, more than 1,500 firms are engaged either directly or indirectly in private equity-related activity. The industry itself employs more than 18,000 people, more than 15,000 of whom are highly skilled professionals. According to a survey carried out last year by the  Financial Times analysing the 30 biggest private equity deals conducted during 2003-04, 36,000 jobs had been created as a result of those investments.
	The Government are for ever stressing—rightly, as it happens—the importance of improved productivity to the United Kingdom's economy, and the fact that we cannot succeed without it. A study by Michael Wright of Nottingham university is particularly insightful. He surveyed the industry output of 30,000 UK factories, and found that factories that underwent a buy-out enjoyed big productivity increases, rising from an average of 2 per cent. below the average before the buy-out to an average of 90 per cent. above the average following a private equity exit deal. Private equity is leading the way in improving the productivity of British business. Moreover, it provides substantial returns for its investors.
	Labour Members may well conjure up images of fat-cat investors, but we should not forget that many pension funds are investors in private equity firms, and many people's pensions depend on their success. They provide fantastic returns for their investors. More than 1,300 UK companies received a total investment of more than £10 billion last year alone.

Andrew Miller: How were those productivity figures measured?

Philip Davies: I am grateful for the hon. Gentleman's interest in the study to which I referred. I will happily send him a copy of the report by Michael Wright of Nottingham university, so that he can enjoy reading it at his leisure. I am sure that it will make it abundantly clear how the figures were obtained. I am sure that he is not questioning the ability of Michael Wright of Nottingham university.

Andrew Miller: The hon. Gentleman has prayed in aid a study carried out by Nottingham university. I want to understand how it fits into his argument, so will he kindly tell the House how the productivity figures were measured?

Philip Davies: I just told the hon. Gentleman that I would send him a copy of the report, which he can study at his leisure.

Andrew Miller: He does not know the answer.

Philip Davies: I am not sure whether the hon. Gentleman is trying to question the ability of Michael Wright of Nottingham university to come up with an impartial report—

Andrew Miller: I am not questioning Michael Wright. I am questioning the hon. Gentleman.

Philip Davies: If the hon. Gentleman is not questioning Michael Wright, whose figures I am quoting, he will accept that the productivity of those companies increased. Perhaps he will give us his estimate of the productivity gain, or lack of it, produced by private equity companies.

Andrew Miller: My point is that there are several different ways of measuring productivity. This could be about massive land disposals or massive redundancies, or it could be about incentives given to the work force by a new management approach. There could be all sorts of reasons for those increases. I want to know what the hon. Gentleman is focusing on.

Philip Davies: If the hon. Gentleman had listened to what I said in the first place, he would know that I made it clear that I was talking about industry output. It was not about selling off land; it was about the industry output of 30,000 UK factories. I hope that that has clarified the position.

Nigel Evans: This reinforces my point about the need for more pre-legislative scrutiny. We are talking about legislation that may have unintended consequences—consequences that the hon. Member for Nottingham, East does not want. It could adversely affect investment in this country, and it could also have a negative impact on jobs. Does my hon. Friend agree that there should be much wider consultation, rather than our saying "Let us kick the Bill upstairs into Committee and see where it goes from there", which would pose a huge danger to future investment?

Philip Davies: My hon. Friend is absolutely right. Before we embark on a measure that could have such a negative effect, people should be able to understand the consequences. Another benefit of pre-legislative scrutiny, of course, is that it could give people such as the hon. Member for Ellesmere Port and Neston (Andrew Miller) time to read studies conducted by Nottingham university.

John Heppell: I fear that the debate is turning into exactly what I did not want it to become: a debate for or against private equity. I certainly have no wish to get rid of private equity takeovers. However, what the hon. Gentleman has said helps to emphasise one of my own points. I suspect that the productivity changes resulted from changes in the way in which the institution worked, which would almost certainly mean changes affecting the work force. Why can the work force not be involved in consultation about such changes beforehand? I do not see why that should be a problem.

Philip Davies: I understand the hon. Gentleman's point, but it is not always possible to reconcile the future of a business with meeting the demands of the work force. That is an unfortunate reality. I realise that he does not want to get bogged down in a debate about the merits of private equity, and we are all satisfied that it plays an important role. What I am trying to explain is how important the industry is to the British economy, and how important it is for us not to damage it. If we did damage it, there could be devastating consequences not just for the growth of the economy and the taxes raised, but for the number of people employed.

John Heppell: Does the hon. Gentleman not believe that this industry should be expected to obey the same rules as the rest of industry?

Philip Davies: As my hon. Friend the Member for Huntingdon (Mr. Djanogly) made clear earlier, there are rules applying to private equity firms in relation to workers' rights. My argument is that the Bill would have such negative consequences for the whole industry that it could cause the firms to invest elsewhere. I shall say more about that shortly. The consequences of where investment goes are very relevant to the debate.

Nigel Evans: That brings me back to a question I asked earlier about whether Lord Jones had been consulted. Clearly the Government have one view, and Digby Jones normally has another view. At least we can have confidence in what he says, because he has been involved in industry for many years. I think that everyone respects his opinions. The CBI, the organisation that he used to head, has said that there is no logic in applying TUPE to private equity transfers, because sufficient protections for employees already exist. I hope the Minister will say something about that. If the legislation already protects workers irrespective of how their company is taken over, why should we introduce legislation that may duplicate what already exists?

Philip Davies: My hon. Friend is right: protection does already exist.

Tony Lloyd: The hon. Gentleman has just made a very important statement. He has said that protection already exists. Will he enumerate the existing protections, so that we can be absolutely certain that he knows what he is talking about and we know what the protections are?

Philip Davies: With the greatest respect to the hon. Gentleman, if he allows me to continue my speech he will hear me deal with the laws that already exist. However, I think it right to begin by explaining the importance of the industry to the UK's economy.
	One of the myths about private equity is that it is a short-term investor, entering a business as a carpetbagger and exiting at the first possible opportunity after making a big profit. A study published earlier this year by the World Economic Forum found that private equity firms tend to hold on to their companies for longer than investors in public companies. In fact, nearly 60 per cent. of private equity fund investors have exited more than five years after their initial investment. It seems that in these increasingly uncertain economic times, private equity has a crucial role in helping to provide stability in the economy, because it takes a long-term investment view. The hon. Member for Nottingham, East said that workers faced uncertainty while people were buying into or taking over firms. On the whole, however, private equity firms invest for longer in companies and therefore create less uncertainty for workers than is normally created.
	In order for our economy to remain competitive, businesses need a stable economic and regulatory environment, but the Bill would serve only to add to uncertainty in the private equity industry about what future regulations might apply to it. I fear that, if such an arrangement applies, some private equity businesses might decide to invest abroad. We are competing in an increasingly global economy, so we cannot rely on people just to keep on investing in British companies alone.

Christopher Chope: Does my hon. Friend accept that the mergers and acquisitions activity that takes place in the City of London is vital for our national economy, and that the City is a global hub for that activity and a market leader because of our mergers and acquisitions regime, which is self-regulated rather than having a lot of petty regulation imposed by this Government or the European institutions?

Philip Davies: My hon. Friend is entirely right. One of the consequences of globalisation is that countries will have to concentrate on their areas of strength. Economies will develop on the basis of certain countries being seen as experts and world leaders in particular fields. Financial services are one of the UK's few remaining genuinely world-beating industries, and we must build on that. We certainly do not want to undermine it. We must make London as attractive a place as possible for private equity and venture capital to come to. That is the only way we will continue to attract the current levels of investment and encourage the brightest and best people from around the world to come here and invest their money here. We do not live in an era of protectionism, or an era when people must invest in this country and put up with the laws as they stand. People can invest money in different countries. We need to try to win as much of that business as we can. Winning it will lead to faster growth, higher productivity, more innovation and a higher tax-take for the Exchequer to pay for better public services. If we lose that investment, however, there will be falling productivity, lower pensions, lower general investment, fewer jobs, and a lower tax-take for the Government to invest in public services. That is why it is crucial that we maintain the investment into this country.
	Mention was made of sovereign wealth funds. They are estimated to have collectively between $2 trillion and $3 trillion at their disposal to invest. I was therefore interested in the comments of the hon. Member for Nottingham, East as to whether sovereign wealth funds would be covered by the Bill and how such measures might apply. I look forward to reading his explanatory notes on the definition of private equity and to seeing how far his Bill covers that area.

Christopher Chope: It is unclear from my hon. Friend's comments whether he is for or against the Bill extending to sovereign wealth funds.

Philip Davies: I hope I am making it clear that I am not in favour of the Bill at all, so I do not want it to apply to any funds, including sovereign wealth funds. I am grateful to my hon. Friend for allowing me to make that point clear.
	We all agree that we must upskill the UK work force. The UK currently has far too many unskilled jobs. There will always be unskilled jobs in any economy, but because of the globalisation of our economy, our reliance on unskilled jobs will decrease as other countries can provide those jobs much more cheaply. Private equity and venture capital companies are among the best providers of skilled jobs in the country. We must attract such jobs into the country, rather than rely on unskilled work—something we cannot rely on too far into the future.

Christopher Chope: Is my hon. Friend aware of this statistic: companies that have received private equity backing account for the employment of approximately 3 million people, which is equivalent to 21 per cent. of UK private sector employees, and that almost all those employees would be categorised as skilled workers?

Philip Davies: My hon. Friend is absolutely right, and I am grateful to him for emphasising my point.
	I mentioned earlier that 1,300 companies received private equity investment in the last financial year. More than three quarters of them received less than £2 million. Those investments were not, therefore, big takeovers; rather, they were crucial to development and growth, often of small companies or start-ups. Small businesses in this country often find it difficult to get going; the high taxes and the number of regulations that they face mean that it is hard for them to become successful. Private equity is one of the key investors in helping small businesses to get started, develop and therefore become bigger businesses that can pay higher taxes and employ more people.
	In the UK, because of the success of private equity in the British economy, firms have started investing more heavily in the companies that they choose to back. Although only 11 more UK companies received investment in 2006-07, the amount invested increased by 50 per cent. to more than £10,200 million. These are, therefore, substantial investments. Investments were made in 312 overseas companies in that period—an increase of more than 37 per cent. on previous years. Total overseas investment by UK private equity companies has reached more than £11,600 million, which is more than is invested in this country; it is 53 per cent. of the total investment, compared with only 42 per cent. in 2005. I have a concern that UK private equity companies are already increasingly investing overseas and that a Bill of the sort that is proposed might well encourage the proportion of overseas investment to increase. I am trying to ensure that that is avoided.
	Most of that investment was in continental Europe—this relates to a point made by my hon. Friend the Member for Ribble Valley—where 214 companies received investment, which is more than double the number funded in all other overseas territories combined. The amount of investment in continental Europe was more than £10,000 million, which is only slightly below the investment in the UK. We therefore cannot take it for granted that UK private equity firms will continue to invest in the UK no matter what burdens we keep imposing on them.
	I want to emphasise a point made by my hon. Friend the Member for Christchurch. Investment in start-ups increased considerably in the last financial year: £531 million was invested in 245 start-up companies, compared with 208 previously. Each company received an average of about £2.2 million, compared with £0.8 million in previous years. Private equity is making a great contribution to our economy. Technology-focused businesses also received more funding in the last financial year—a 35 per cent. increase in investment on the previous year. Private equity firms are therefore providing lots of investment in the country, and lots of jobs—jobs that are in industries that we need to attract to be successful in a global economy.

Andrew Miller: The hon. Gentleman is describing a successful British economy. He is right that that is partly a result of investment patterns. However, those investment patterns are a result of the Government's success in attracting that investment. He should therefore praise the Labour Government for once.

Philip Davies: Once again, the hon. Gentleman is clearly not listening to what I am saying in the round. I made it clear that this industry is a success story in the UK economy—despite, rather than because of, the Government. I repeat, for his benefit, the point I made showing where the problem lies. Whereas 53 per cent. of total investment by UK private equity companies last year was abroad, in the previous year it was only 42 per cent., so private equity companies are increasingly investing money abroad rather than in this country. The trend is going in the wrong direction, which is why I argue that the Government must do more to attract private equity investment in this country.

Christopher Chope: I hesitate to disagree with my hon. Friend about anything, but is he right that the Government should try to second-guess the location of investment by private equity companies? Surely they are investing overseas to the extent that my hon. Friend describes because they think that they can get a better return on their investments than they can in the increasingly regulated UK markets.

Philip Davies: My hon. Friend is absolutely right. I was nervous when he said that he was hesitant about disagreeing with me, but he is certainly not disagreeing with me at all. That is precisely the point I am trying to make—that we want the Government to create the economic climate that will encourage people to invest here rather than overseas. I certainly do not argue for any regulation to make them invest here, which would be unenforceable as well as undesirable. I simply want people to feel that they will get the best returns in this country rather than abroad.
	The private equity industry is extremely important to our regions. Although London and the south-east without doubt attract by far the most investment—about 60 per cent. of the UK total—quite a lot of money is invested in other parts of the country. For the benefit of my hon. Friend the Member for Ribble Valley, let me say that the north-west is one of the regions that benefit most, as 146 companies received £614 million of investment last year, representing 11 per cent. of companies and 6 per cent. of the total invested in the UK. In my area of Yorkshire and the Humber, £1.2 billion was invested in 83 companies, accounting for 12 per cent. of the overall UK total. I certainly do not want to pass Bills that might have a negative effect on the economy or the work force in Yorkshire, so I view my opposition to this measure as being important to my constituents.

Jim Dowd: The hon. Gentleman has been speaking for well over half an hour. I, for one, do not dispute the importance of the private equity or the venture capital industry in this country. He says that he does not want the Bill to damage those industries. In response to an intervention from my hon. Friend the Member for Manchester, Central (Tony Lloyd), he said that he would be coming on to the Bill's provisions at some stage. Given that that was 25 minutes ago, will he give us some idea of when that moment might arrive?

Philip Davies: I am grateful to the hon. Gentleman and am delighted to hear that he is waiting in anticipation of what I might say further. I am sorry, Madam Deputy Speaker, if hon. Members feel that I am going too slowly, but I like to think that I am being generous in giving way to interventions. When we are conducting a debate, it is important to allow interventions so that Members can press their points, and I have been generous in allowing the hon. Gentleman to intervene. If he wants me to get on with my speech, perhaps it would be better if he and his hon. Friends did not intervene.

Nigel Evans: I, as much as any other hon. Member, am waiting with bated breath to hear my hon. Friend's examples, which he said 10 minutes ago—not half an hour or 25 minutes ago—that he would come on to. My hon. Friend mentioned the importance of the regions, and as I look around and see hon. Members in their places I note that many regions are represented. He specifically mentioned the north-west. Great emphasis is placed on the City boys and financial brokers who are based in the City, but does he agree that such people are also important in the regions? In Manchester, for example, quite a considerable number of people are involved in stocks and shares and equity deals. It is important to us in the regions that we safeguard those jobs as well as encourage investment.

Philip Davies: My hon. Friend is entirely right about that. It is noticeable that Labour Members come from certain parts of different regions of the country and I can guarantee that all regions will benefit from private equity investment to some extent. My perspective is that Yorkshire and the Humber is, outside the south-east, probably the single biggest beneficiary of private equity investment in the country. It is absolutely crucial for my constituents and my local economy that we do nothing to damage that industry.

John Heppell: The hon. Gentleman's speech so far has been a great advert for private equity companies generally. He keeps referring to the problem of placing additional burdens on business, but does he think that the existing TUPE regulations should continue to apply?

Philip Davies: I am perfectly satisfied with the current arrangements. As I made clear earlier, this country's private equity industry and the financial services industry are world leaders, and that has been achieved under current regulations. I argue for the maintenance of the current regulations, but I do not want to add any additional regulations.

John Heppell: The hon. Gentleman misunderstands me. I am not talking about the private equity industry, but industries generally, to which the TUPE regulations apply. Does he agree that the regulations should continue to apply in those industries?

Philip Davies: Yes, I am quite happy with the current arrangements across the board. I am not arguing for any change. My purpose is to argue against the hon. Gentleman's Bill, as its provisions would damage this important sector of industry. I understand the hon. Gentleman's point that as the regulations apply to other companies they should apply to private equity firms. That is where we are: the TUPE regulations implement a European directive, so there is nothing we can do about it. I wish we could do something about the implementation of European directives, but there is not, so there would be no point in my arguing for the reversal of a European directive agreed 30 years ago. I am merely arguing that the rules should not be extended in the way that the hon. Gentleman wants. If the rules in his Bill were introduced, it would damage private equity businesses and might lead them to invest elsewhere.

John Heppell: We are not talking about something that happened 30 years ago, but about the Transfer of Undertakings (Protection of Employment) Regulations 2006. My point was that those regulations apply across industry. So far, the hon. Gentleman has not provided any examples of companies that, as a result of the regulations, have had to cope with some bad or terrible burden. If the existing regulations are okay for those firms, why would it be such a problem if we applied the same ones to private equity?

Philip Davies: The hon. Gentleman talks about increased burdens, but I am not talking only about the burdens he refers to because I believe that this Government have imposed more burdens and regulations on industry than probably any other Government in history. If the hon. Gentleman does not believe that any of those burdens have made any difference to businesses, he is certainly not living in the same area as me. I think that the burdens imposed by the Labour party on British business, particularly on small businesses, have done an awful lot of damage to this country's economy and to those small businesses.

John Heppell: Let us be clear. Is the hon. Gentleman saying that TUPE represents a burden on business generally? Is he arguing that TUPE is bad for industry? What he is effectively saying is that we should not have TUPE at all, if it is responsible for putting burdens on business.

Philip Davies: This Government have imposed many regulations on businesses. If my memory serves, about 3,000 or 4,000 regulations are introduced every year, all of which have an effect on businesses. It is a salami slicer approach. One regulation might not be a big problem in itself, but when it is one after another and another, it starts to create big problems for businesses, particularly for small businesses. I am sure that, as a diligent Member of Parliament, the hon. Gentleman has spoken to small businesses in his constituency. I would be astonished if none of them had expressed concern about the level of regulation that this Government have imposed on them in the past 10 years.

Lorely Burt: Does the hon. Gentleman agree that the TUPE arrangements were extensively revised, after great consultation, as recently as 2006? I find it difficult to imagine why the current business atmosphere was not taken into account in the 2006 regulations. I wonder why the hon. Member for Nottingham, East (Mr. Heppell) feels the Bill is necessary, given that TUPE has only just been revised. Perhaps the hon. Member for Shipley (Philip Davies) wonders that too.

Philip Davies: The hon. Lady makes a pertinent point. We should reflect on the fact that in the past 15 or more years, this country has enjoyed economic growth. There will always be growing numbers of business and people in employment at such times. The resilience of the economy to a serious downturn has yet to be tested. The complacent view of the hon. Member for Nottingham, East that the regulations have somehow helped businesses in the past 15 years may well be shattered if we face an economic downturn in the not-too-distant future. Only in a downturn can we see how resilient our economy is. I contend that it is not quite as resilient as people might think.

Tony Lloyd: It might help the hon. Member for Solihull (Lorely Burt) if I say that the point of the Bill, which the hon. Member for Shipley has not yet refuted, is to extend the application of TUPE. Does the hon. Gentleman disagree with that? If not, will he give us the list of the protections that apply to employees in private equity companies that make the Bill unnecessary, which he has promised a number of times?

Philip Davies: It is difficult to get to the point of my speech, for which hon. Members are waiting with bated breath, if they keep intervening and preventing me from doing so. It is a frustrating position in which to find oneself. I am not sure whether the hon. Gentleman is saying that I should not take any further interventions from him, so that I can get to my point. I am doing the best I can, but I am also being as generous as I can so that Members may have their say. That is important in a debate. I am trying to be generous to the hon. Gentleman, not restrict him.

Tony Lloyd: I don't think you're getting there.

Philip Davies: I certainly am, but the hon. Gentleman will have to be slightly more patient.
	It is important that we examine the sources of the funding raised for private equity. Last year, members of the British Venture Capital Association raised independent funds for investment totalling more than £34 billion, a rise of 26 per cent. on the previous year's figure. A greater proportion than previously came from UK sources, which now account for 28 per cent. of the total raised. An awful lot of the money invested is British.
	As I said earlier, pension funds continue to be the most active private equity investors. They provided almost £10 billion of investment last year—29 per cent. of the total. The hon. Member for Nottingham, East has tabled the Bill with the noble purpose of protecting workers' rights, but many of the workers whom he seeks to protect have their pensions tied up in funds that invest in the private equity industry. It is therefore as crucial to them as to anyone else that we do not introduce legislation that damages their funds.
	Although overseas investors remain by far the richest source of UK private equity investment capital, more UK institutional and private investors are committing to it, because it is a hugely successful asset class. The UK private equity market is the largest and most developed in Europe, accounting for well over half of European investment. It is second in the world to the United States, whose economy is very successful, as we all know.

Madam Deputy Speaker: Order. The hon. Gentleman said that he would give some background on private equity companies. I think that he has now done that, and I hope that he will turn to the measures in the Bill.

Philip Davies: Of course I will abide by your ruling, Madam Deputy Speaker. I hope that I have managed to go some way towards making clear how important the industry is to the British economy.
	I turn to the Bill, as you direct, Madam Deputy Speaker. I notice the hon. Member for Lewisham, West (Jim Dowd) sitting forward in his seat with eager anticipation.

Tony Lloyd: On a point of order, Madam Deputy Speaker. Following your ruling to the hon. Member for Shipley (Philip Davies) a few moments ago, would it be in order for him to set the Bill in context by giving us the list of legal protections that exist for employees in private equity companies?

Madam Deputy Speaker: That is not a point of order for the Chair, but the hon. Member for Shipley has heard my ruling and I have no doubt that he will now proceed to discuss the content of the Bill.

Philip Davies: Indeed, Madam Deputy Speaker. I think that I made it abundantly clear before the point of order that I was about to do so. If the hon. Member for Manchester, Central (Tony Lloyd) is so keen to get the list, I suggest that he go to the Library, whose staff will be more than happy to furnish him with it. If he cannot wait any longer, he should go there now. I am sure that they will provide the list happily.

John Heppell: Some of the information has been provided to me. It is stated that such protections are included in the Information and Consultation of Employees Regulations 2004, which implement the EU information and consultation directive, 2002/14/EC, and in the Companies Act 1985, which will be replaced by the Companies Act 2006. That legislation has been cited to me as containing the relevant protections, but in reality it does not give the same protection as TUPE.

Philip Davies: I am grateful to the hon. Gentleman. There seems to be a new tactic: the hon. Members at the very back of the Labour Benches ask me to come on to my points, then the promoter of the Bill anticipates them. That is kind and generous of him, but I shall try to make some progress. I am not sure why Labour Members are so reluctant for me to do so.
	The Bill is intended to:
	"Extend the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 to the acquisition and disposal of substantial shareholdings by private equity companies; and for connected purposes."
	Responding to an intervention that I made, the hon. Member for Nottingham, East tried to define "substantial shareholdings". He said that it was defined in the explanatory notes, but I have not had them, as I made clear. From his response to my intervention, I am still not sure what a "substantial shareholding" is, and what constitutes a shareholding that might be considered a controlling interest. For example, there has recently been great controversy about Sky's stake in ITV, which I believe is about 17.9 per cent. A lot of people say that it gives Sky too much power, but I am not sure whether such shareholdings would be covered by the Bill. Does a controlling interest mean that someone must have more than 50 per cent. of the shares in a business? Will he be clearer about what he means by "substantial shareholdings"?
	Key features of the Bill include the imposition of information and consultation of employees obligations similar to those that apply in the context of a business transfer. The Bill would also make void post-acquisition changes to contracts of employment unless the changes were made for an economic, technical or organisational reason. The Bill would restrict the ability to vary or rescind any union recognition agreement following an acquisition, and would introduce a new right to apply to court to seek an injunction to prevent a transaction from being completed until ICE obligations were complied with.
	The combination of collective redundancy consultation obligations, rights under collective agreements, and ICE agreements already provide employees with a broad range of protections and rights to receive information and take part in consultation. If those mechanisms are used as part of a constructive dialogue, they should be sufficient to protect employees during all share acquisitions. As far as I can see, the Bill affords additional protection in two main respects. First, it protects trade union recognition, and secondly it provides the ability to secure compliance with information and consultation rights. That does not seem particularly necessary.
	From a legal and commercial perspective, it is inappropriate to amend TUPE to address private equity acquisitions and not trade acquisitions. In practice, post-acquisition, a trade buyer is more likely to wish to achieve greater synergies with their own business, and give rise to job losses, than a private equity house that is investing in a business with a view to making it work more effectively and prosperously, so that it can avoid selling the business in a distressed situation in future. Private equity works as a business not just in one way, but in many ways. Contrary to what the hon. Member for Nottingham, East, suggested, private equity can be used not to take over a company and cause it uncertainty, but to shore it up and ensure that no future sale causes workers uncertainty. Implementing the Bill and bringing private equity acquisitions into the scope of TUPE could give rise to an uneven marketplace and provide trade buyers with an unfair competitive advantage.
	I should be very interested to know what view the Minister for Employment Relations and Postal Affairs takes of the Bill. I do not know whether the Government have the appetite to introduce further legislation regulating employee consultation or trade union derecognition rights. I am not sure whether that kind of action was part of the Warwick agreement that the Government signed up to before the last election, when they had run out of money. I am not aware of any Government proposal to introduce a similar measure. I should be grateful to learn from the Minister whether the Government—or, as the hon. Member for Ribble Valley asked, the European Union—plan to introduce any regulation on the subject.
	What transactions might be caught under the Bill? The Bill applies to the acquisition and disposal of substantial shareholdings, as we have discussed. A "substantial shareholding" may mean an interest in shares such that the undertaking holding the interest can exercise a dominant influence over the employee and entity. As I said earlier, I do not know what constitutes a controlling interest. Would it be 51 per cent., or a lower figure? As my hon. Friends the Members for Ribble Valley and for Christchurch said, we do not know how a private equity company is defined. That could be dealt with in separate regulations. It is also unclear what would come within the scope of "connected purposes"—a phrase used in the Bill.

Christopher Chope: I have an advantage over my hon. Friend, as I have a copy of the explanatory notes, kindly provided by the promoter. Acting as his honorary Parliamentary Private Secretary, I have made a number of copies. Paragraph 4 makes clear his explanation. It mentions:
	"'private equity organisations' (companies whose shareholdings are not listed on a recognised stock exchange)".
	That seems to be the definition that the promoter has in mind.

Philip Davies: I am incredibly grateful to my hon. Friend for that clarification—if, indeed, it is a clarification—of what is within the scope of the Bill. I am not entirely sure that it clears things up completely.

Christopher Chope: Surely the implication of the explanatory notes is that a private equity organisation would be any organisation that is incorporated, other than a public listed company.

Philip Davies: My hon. Friend may well be right. He is certainly more expert than I am at understanding parliamentary Bills and the language therein. His definition may well be right. I should certainly be grateful if the Minister and my hon. Friend the Member for Huntingdon expressed their understanding. When the hon. Member for Nottingham, East winds up, perhaps he will clarify the point and say how he understands the position.
	The Bill would make the information and consultation obligations that apply to business sales apply to equity transfers, too. Vendor and purchaser of the substantial shareholding would be required to inform and consult employee representatives about any measures that are proposed relating to the acquisition. More onerously than in the context of a business sale, the Bill requires employees to be given information on the five-year period following the acquisition concerning the structure, the economic and financial situation of the vendor, the purchaser, the employing entity, the probable development of the employer's business, the probable development of production and sales, and probable trends in investment, employment, organisational changes, working and production methods, mergers, cuts, closures and redundancies.
	Employers may be particularly interested in all those things, but it is difficult to know whether it would be fair to make a business provide all that information. It may not know those things itself. In my experience, the most successful businesses are those that communicate best with their employees anyway. I am not entirely sure that a successful business needs to be told to keep its staff informed of any developments; most of them already do that.
	According to the Bill, training and assistance must be provided to employee representatives, so that they can deal with and respond to information provided as part of the consultation exercise. It is important to consider the penalties that may apply to businesses that do not follow the provisions in the Bill. Failure to comply with the consultation regulations would give employees or their representatives, including trade union representatives, the right to apply to court for an order seeking compliance. The court would have the power to prevent the share sale until the consultation obligations had been satisfied. Those obligations are rather too onerous for the market. They could well act as a deterrent to those who want to invest in companies. As I have made clear, the aim in some investments is to shore up a company that is under threat, and not just to take it over. The provision could therefore undermine the rights of workers and give them less confidence; I am sure that that would be an unintended consequence.
	I think that I am right in saying—the hon. Member for Nottingham, East might be able to help me on this point—that the Bill provides that no changes may be made to the terms and conditions of employment of employees in connection with the share acquisition, unless there is an economic, technical or organisational reason to do so.

John Heppell: The hon. Gentleman is correct, and the same situation applies under TUPE.

Philip Davies: From what I read in the Bill, I also believe that any dismissal in relation to the acquisition would be automatically deemed unfair, unless it was shown to have been made for economic, technical or organisational reasons. I am not sure that I favour an approach in which any dismissal is automatically deemed unfair, unless the opposite can be demonstrated. That may well lead private equity investors, who, unlike other industries and businesses, have a range of investment opportunities around the world, to look to make their investments elsewhere.
	When the hon. Member for Nottingham, East replies, perhaps he will clarify whether the Bill goes beyond the protection afforded to trade unions by TUPE in providing that any variation or recision of a recognition agreement in connection with the equity acquisition or disposal will be unenforceable unless it is for economic, technical or organisational reasons. The Bill may go beyond what he said it was able to do.

John Heppell: I understand that that is the TUPE requirement. If there is anything in the Bill that goes beyond TUPE, I undertake to remove it. I have already said that I will remove the injunction requirement. Anything that anyone can identify that goes beyond the existing TUPE regulations I will remove from the Bill.

Philip Davies: I am genuinely grateful to the hon. Gentleman for that clarification. Some of the provisions might go beyond the TUPE regulations, so it is helpful to know that he would be prepared to move amendments in Committee if necessary.
	My hon. Friend the Member for Ribble Valley mentioned the CBI, which opposes the Bill. Its view is that while some deals have resulted in short-term job losses, they are more than made up in the longer term by subsequent growth in businesses and employment. It does not believe that there is any logic in applying TUPE to private equity transfers because TUPE was designed to provide protection for employees where there is a change of employer. In a private equity transfer, there is no change of employer, so continuity of employment on existing terms and conditions is already protected for workers. That is why, to return to the point made by the hon. Member for Lewisham, West, the CBI does not believe that the Bill is necessary. It believes that any extension would not add significant additional protection for the workers, but could lead to more complex and lengthy transactions, which might damage the UK economy.
	My main purpose in opposing the Bill is to ensure that we do not damage UK business. The Bill's promoter wishes to protect workers' rights. The CBI's view is that it will not do a great deal to achieve his objectives, but it could do a great deal to damage my objectives.

Nigel Evans: As I understand it, one of the sovereign wealth funds that we have heard about today might well invest in a particular company, perhaps to the extent that it takes a controlling interest, but have no say in its running. It will have invested the money in the first place because it was content with the way in which the company was being run. Therefore, we would be introducing a new obligation on behalf of that company that might deter it from investing in the first place. I would like to know the answers to such questions before I support the Bill.

Philip Davies: My hon. Friend makes a good point. The Bill's promoter might be able to clarify some of the points that he makes to try to reassure him. I am not entirely sure that I would be reassured, but my hon. Friend might be. The hon. Members for Lewisham, West and for Manchester, Central, who seems not to have had the patience to wait— [Interruption.] He is here; he was hiding behind the Chair. I thought that he had gone to the Library to pick up some information, as I suggested earlier.
	The main thrust of my argument is that because there is no change of employer in a private equity transfer, existing employment legislation applies, so in terms of employment rights, an employer cannot unilaterally vary a contract of employment. Changes to individual terms and conditions, such as pay, hours and holidays, can be achieved only by agreement with the employee. Legislation also protects employees from being incentivised to opt out of collective agreements by accepting more generous terms. Any existing recognition and collective agreements remain in force following a transfer of substantial shareholdings.
	Where there is a works council or an employee representative committee, employees have a right to be informed and consulted about any significant changes to their business. If no such body exists, employees in businesses employing more than 50 people can, I think from the next financial year, initiate procedures to require the introduction of such a staff council or committee. That is all part of existing legislation, which would not be affected by any private equity transfer and share sale. Where more than 20 redundancies are envisaged, legislation already requires collective consultation of at least 30 days in advance, and 90 days if more than 100 people are affected. That consultation has to be meaningful and cover the reasons for the dismissal as well as the consequences. All those provisions already exist, so even given the laudable objectives of the hon. Member for Nottingham, East, the Bill is not necessary.
	The Bill would simply allow employee representatives to delay transactions, possibly indefinitely in some cases, making the UK a less attractive place to do business. Therefore, it would not have the benefits that the hon. Gentleman seeks. I suspect that its only consequence would be to make private equity firms, which I have sought to point out make such a valuable contribution to the UK economy, less likely to invest in the country and more likely to do what they are already doing, which is to invest increasing amounts overseas to the benefit of other countries, not ours. I want to arrest that decline in the proportion of private equity money invested in the UK and instead see an increase. Such investment greatly benefits the UK's economy, employment, innovation, productivity and the skills base, which results in increased taxes for improving our public services. I fear that the Bill would undermine all those efforts, and that is why I oppose it.

Andrew Miller: I shall be extremely brief in setting out my reasons why the hon. Member for Shipley (Philip Davies) is wrong. He set out his argument, first in a convoluted way and then in a precise way, saying that he was satisfied with the regulations. He also said several times that we have an over-regulated economy, but he should reflect on whether we should have a better regulated economy.
	In my judgment, part of what my hon. Friend the Member for Nottingham, East (Mr. Heppell) is seeking to do would take us down the road of creating better regulation, because he seeks to create a harmonious approach across all types of investor and business.

Philip Davies: Will the hon. Gentleman give way?

Andrew Miller: No, I will not give way. The hon. Gentleman has had an hour.

Philip Davies: I was very generous in giving way.

Andrew Miller: Yes, but— [ Interruption. ]

Madam Deputy Speaker: Order. The hon. Gentleman is clearly not giving way.

Andrew Miller: I certainly will not give way until I have set out at least my opening remarks.
	There is a powerful argument for creating more harmonious sets of regulation in all sorts of areas. I shall illustrate that with one small point: this week, my Select Committee, the Regulatory Reform Committee, considered a change to a set of rules that had been in place since 1974 within health and safety provisions—something that is absolutely fundamental to the well-being of workers and the success of our economy. Two bodies had been in place since 1974—the Health and Safety Executive and the Health and Safety Commission. I challenge any Member to read back through the Robens report of 1973 and the debates that took place in the House and the other place in 1974 and give me a simple explanation of why there ever were two separate bodies. They were illogical at the time, and they stayed illogical, and the Government have now created a integrated body, as part of their drive towards better regulation. That is the kind of approach that we ought to adopt.
	On 22 February, the House supported, with an overwhelming vote, the Temporary and Agency Workers (Equal Treatment) Bill—the private Member's Bill that I am seeking to take through the House. That, too, like my hon. Friend's Bill, is about ensuring equality in the workplace, and it would create a more level playing field. I should have thought that, on any logical basis, the business community would like greater equality in the workplace, business compared with business. Just as my hon. Friend rightly said in his examples, different workers in different circumstances are treated differently for no good reason. Exactly the same point applies to my Bill, as agency workers and permanent employees are treated differently for no good reason, except by people who deliberately want to depress labour rates and drive down employees' earnings.
	The only bad guys in the equation that my hon. Friend describes in his Bill are, of course, those people who are using an opportunity to take control of a business deliberately to depress employees' earnings or to get rid of large swathes of them. I accept that there may be perfectly good economic reasons for that in some circumstances. If a business is failing—usually, most business failures are caused by the failure of management—it is not unreasonable for the incoming investor to change the management team and even to consider, of course, having to change working practices and so on. That is a perfectly logical thing to have to consider. But there can be no moral basis on which such an investor should not have a duty of care towards those employees that he will either dismiss as redundant or retain under different terms and conditions of employment.
	There is no logical basis on which different categories of investor should be required to act differently. My hon. Friend has been frank with the House in recognising the weaknesses in some aspects of the drafting, but the important thing that the House should acknowledge is that he has hit on a very important issue in respect not only of fairness and the equal treatment of different categories of employee, but of different types of business as well. It would be totally illogical if, by use of the loophole that he has identified, an incoming investor cut a swathe through terms and conditions of employment, got rid of a lot of people and created an artificial competitive position against someone with a different set of requirements. From both the employer's and the employee's point of view, the principle that my hon. Friend seeks to address ought to be adopted across the economy.
	In the 1980s, I worked with private investors in the Merseyside economy as a director of the Merseyside Enterprise Board. We helped to support companies in the days before Margaret Thatcher—the noble Lady—abolished the metropolitan counties. Eventually the board disappeared—I will not go down that track, because you will rule me out of order, Madam Deputy Speaker—but before it did so, it worked in close partnership with private investors. When helping to develop investment in companies, we told the investors and entrepreneurs with whom we dealt that a condition of the assistance we provided with taxpayers' money was equality of treatment for employees in their businesses, as measured by the statutes in force at the time.
	That is not a new principle, and it has become more important, as the hon. Member for Shipley pointed out, because the scale of venture capital and equity funds has grown enormously recently, so we must deal with the problem. When my hon. Friend the Minister replies to the debate, I urge him to accept, as in other areas of the economy, that equality and the equal treatment of employees should apply, for the reasons set out by my hon. Friend the Member for Nottingham, East, and because of the overall benefit to the economy of a more level playing field. The measure is beneficial to both employees and employers.

Lorely Burt: There has been a lot of discussion this morning, and I should like to suggest that a key word is balance: we must balance the fair treatment of workers with the need to respond to the private equity market and the contributions that it can make.
	Private equity has increased a great deal, as the hon. Member for Shipley (Philip Davies) said. Figures from the TUC show that one in 12 private sector workers are employed by private equity companies. The TUC has outlined its concerns, and I have looked carefully at the points that it has made. It is worried, because private equity threatens to erode the unions' ability to influence business. That is a reasonable concern, and it deserves consideration.

Christopher Chope: Why is it a reasonable concern? Surely it is for individual workers to decide whether they want to join a trade union?

Lorely Burt: I am grateful for the hon. Gentleman's intervention, but I am not sure where he is coming from. I do not see why one's right to join a trade union should be any different whether one works for a private equity company, a public sector organisation or a public company.
	The TUC says that disclosure requirements are less for private companies, which file accounts up to nine months after the year end, do not have to produce quarterly or interim results, and do not have to put their annual report on a website—it has to be applied for. The Companies Act 2006 requires quoted companies to include in their business review information such as business trends, information on the company's employees and suppliers, environmental matters—hugely important—and corporate social responsibility matters. The TUC points out that that is not a responsibility for private equity companies, because they are indeed private.

Christopher Chope: The hon. Lady seems to be arguing in favour of the same regime applying to private companies as to publicly quoted companies—surely she does not believe that.

Lorely Burt: The hon. Gentleman is absolutely right—no, I do not believe that. I am trying to set out a balanced argument to acknowledge the TUC's point of view.
	One of the important points of difference is that a public company has shareholders who are entitled to know all the information that I mentioned in order to make a decision on whether it is the sort of company that they want to invest in. There is no such requirement on privately owned companies. The TUC points out that that has social and economic impacts on society, and implies that private equity companies and all private companies above a certain size—although I have not been able to work out exactly what size it is referring to—should produce such information in order to create a level playing field. In the case of large companies with customers, those customers will be interested to know about the business practices of any company that they are going to buy from. However, a good company should publish that information anyway, without a statutory requirement.
	Another reason why the TUC does not like private equity companies is that they are often highly leveraged, which means that there is a high ratio of debt to equity and therefore a riskier future for their employees. It has a point, certainly in the current economic climate, although such companies are prepared to take on what are often much riskier propositions themselves. The TUC also points out that the debt of private equity companies is tax-deductible, so that high performance indicators for private equity companies would be only mediocre if that factor was stripped out of their results. We heard a lot from the hon. Member for Shipley about the wealth-creating abilities of private equity companies, but the TUC is not happy about the fact that those tax factors apply.
	Another thing that sticks in the unions' throat is the fact that private equity company partners are taxed on the basis of capital gains tax, not income tax, so they can pay only 10 per cent. tax instead of the higher rate of 40 per cent. that they arguably should be paying. That is a fair point.
	Even if the points that the unions have made do not impinge on this particular Bill, it may be interesting to give a bit of background. Another macro-economic implication that the unions do not like is that purchasing of publicly quoted companies reduces the size of the stock market, and if the size of the stock market is reduced, the liquidity of capital is reduced, which is seen as vital in ensuring the efficiency of capital investments. In summary, it seems that the unions see private equity as an unwelcome and uncontrolled intruder that gums up the economic works, and threatens jobs and not least the influence and power of the TUC itself.
	Will the Bill sort out the problems that I have described? Besides treating large private equity companies—again, I am not sure what "large" means—like publicly quoted companies, it adds further restrictions to the activities of publicly quoted companies as well. That is the information I have from the CBI, and I take on board the points made by the hon. Member for Nottingham, East about having a level playing field. However, the CBI is convinced that there are issues in the TUPE requirements that will have a detrimental effect if they spill over into the affairs of public companies. If the Bill goes to Committee—I regret to say that it probably will not—it will be important for us to consider those matters carefully. Members of all parties would not want the Bill to reduce the competitiveness of any sector of the market, although I fear that it might.
	It is worth repeating that much of what the Bill proposes are protections that employees of privately owned companies already have. They already have a statutory right for unions or other representative bodies to be consulted if 20 or more redundancies are planned, and a right to be informed or consulted about any significant change in the business. If there is no existing works council or employee representative in place, from 1 April, as the hon. Member for Shipley mentioned, a work force of 50 employees or more can initiate procedures to introduce one. They already have the right to ensure that any existing recognition or collective arrangements remain in play; they retain the same terms and conditions, and rights, as they had prior to the sale.
	The TUPE regulations were brought in to protect the rights of employees in non-share sales, to give those employees the same rights as those in publicly owned companies. I am not trying to be tautologous, but if the aim of TUPE was to give employees the same rights that those in private companies had already, what on earth are we doing debating whether existing TUPE requirements should apply to private equity takeover companies? The TUPE regulations were revised in 2006 only after lengthy consultations, and I question how relevant it is to bring the matter up again so soon after a lot of time, attention and consultation went into producing the last lot of regulations.

John Heppell: The regulations were introduced in 2006, but most of the discussions about them would have ended in about 2004. During the negotiations, the issue was raised by the trade unions, but it was not acted on. It was not accepted.

Lorely Burt: I am grateful to the hon. Gentleman for that intervention.
	I would like to address the extra aspects of the Bill. The hon. Gentleman says that there will be no difference between private equity takeover and public share takeover companies. He has been talking about the need for consultation, but—I am looking to him in the hope and expectation that he will be able to help me on this—there is a concern that the employees of private equity companies will not receive the same degree of consultation. It is worth considering the implications of additional consultation, beyond that provided for under existing employment rights, for the business of a private equity company trying to complete a takeover.
	One of the CBI's points—the hon. Member for Shipley referred to this, too—is that because of the speed at which companies sometimes have to be taken over and turned around, to the benefit of the employees, the requirement for consultation will make the timeline unattractive. If extensive consultation is made an institutional requirement, the mergers and acquisitions landscape may become a lot less attractive for investors, with, as the CBI has said, an injection of a great deal more uncertainty and delay.
	We have discussed the scope of the Bill at some length. Again, there is a big concern about leaving the definition of private equity to the Secretary of State, as defining the term will be extremely difficult for any person or organisation to do. We have discussed whether the term will include venture capital or small innovation businesses. The word "large" does not really help us understand exactly what sort of animal we are talking about. That is another aspect of the industry, which is so fluid and moves so quickly, changing its composition quite rapidly. It is therefore much more difficult to pin down who is involved, at what stage, and what level of consultation would be appropriate, for both small and large businesses.
	I know that the hon. Member for Nottingham, East has his heart in the right place in wanting to prevent exploitation, but just as with the Temporary and Agency Workers (Equal Treatment) Bill, promoted by the hon. Member for Ellesmere Port and Neston (Andrew Miller), the problem is that we are talking about different aspects of business, with different needs and requirements. A one-size-fits-all approach is unlikely to fulfil the requirements of a diverse industry with different needs.
	If the Bill drove private investors away, as the hon. Member for Shipley said, there would be plenty of other fluid and attractive markets elsewhere in the world. We have been successful in attracting investment into this country. Although we must have a balance of fairness for all people who work in this country—that is absolutely a given—at the same time, our flexibility and fluidity enable us to achieve that competitiveness and attractiveness to investment of all different types.
	The TUC is clearly not impressed with private equity, but the CBI believes that it has
	"A highly significant and beneficial impact on employment and the economic prosperity of the UK".
	That is because of private equity's unique abilities. It will often look for underperforming businesses and inject much-needed capital into them. Private equity can restore profitability and turn failing businesses around in a relatively short period. However, to do that it often has to make unpalatable decisions, such as those involving job losses or culture change. People may lose their jobs, but in the long run that may be the only way for more jobs to be saved.
	The World Economic Forum found that despite initial job losses, private equity firms create 6 per cent. more greenfield jobs. They also create faster growth: their annual sales increase at an average 8 per cent., compared with 6 per cent. growth for FTSE 100 companies. The Bill would stifle that market, and for that reason, the Liberal Democrats do not support it.

David Kidney: Like the hon. Member for Shipley (Philip Davies), I congratulate my hon. Friend the Member for Nottingham, East (Mr. Heppell) on his success in the ballot. I have taken part in it for 11 years without success, but that experience does not dim my pleasure at my hon. Friend's success and his choice of Bill, which I am pleased to support today.
	I support the Bill in a framework of fairness. Admittedly, my focus is on the fairness of the treatment of the work force, whose very livelihoods are at stake during the transfer of an undertaking. However, more widely, I should also say that I do not come to this debate with any bias for or against any particular form of enterprise. There is also fairness in the world of business, if there is—to use the cliché—a level playing field between businesses in respect of how they compete to take over other businesses.
	What is unfair at present is that the work force of a company that changed hands for £100 would be protected by the 2006 TUPE regulations, but the work force of a company whose shares changed hands for £100 million would not. That is the unfairness that I want us to address in this debate.
	It is true that the TUPE regulations protect a work force of one business that is sold to another from the automatic termination of their contracts as a result of the transfer; at common law, they would all be dismissed as a result of the transfer, but the TUPE regulations continue their employment. If, however, simply the shares in the employer are sold, there is no transfer of the business and therefore no common-law termination of the contracts. In that one regard, it is fair to say that as far as the work force are concerned, there is no difference between TUPE and a private equity purchase. The TUPE regulations give protection from automatic, unfair dismissal related to a transfer of employer; such protection is not given when there is a transfer because of the sale of shares to a private equity business.
	The final point about information and consultation has been a subject of great debate today. It is important to point out that the TUPE regulations give a specific right to the work force to have information on and be consulted about the transfer long enough before it takes place. There is no such protection for the work force under general law or other forms of general regulation about consultation and information. That point is crucial to my hon. Friend's Bill. There are subsidiary points in the TUPE regulations about collective trade union agreements and acquisitions from insolvency which the Bill also seeks to apply to such cases; they are significant, but of a lower order than the rights that I have already mentioned.
	My hon. Friend's undertaking to the House today is important. It is to reassure people who might previously have objected to the Bill on the grounds that it would extend the protection given by the TUPE regulations. That is not his intention, and he has made that clear today, which is helpful.
	In an intervention, I made a point that I want to repeat now. Given that sovereign wealth funds are beginning to wash up on this country's shores, there will be significant changes of ownership in the coming years. If we allow one form of ownership, buying up the shares, to have less legal impact for the people who make that decision than the other, buying the company and obliging those involved to follow the 2006 TUPE regulations, when people start to choose the easier route for them—and the harsher one for those who work in the businesses targeted with those funds—I predict that our constituents, the media and hon. Members will start to ask why we did not close that loophole when we had the opportunity. My hon. Friend the Member for Nottingham, East has given us such an opportunity today, and I hope that we will take it. Our constituents will want to know that there is transparency in the arrangements for buying up companies, that there are not distortions in the working of the market, and that employees have protection in such situations. We have the opportunity to make that happen today.
	When the TUPE regulations were first introduced into law in 1981, at that stage they did not protect outsourced services such as catering and cleaning. The 2006 regulations did extend to those areas, so we have made changes in the past to ensure that workers are properly protected. I argue that we should make another change to protect another group identified today. If some people say, "The law is clear, they are not covered, and that is that," I ask them to consider the case to which the Library research paper refers, Millam  v. Print Factory (London) 1991 Ltd., a Court of Appeal decision last year. In that case, a company did indeed think that by buying all the shares it avoided its obligations under the 2006 TUPE regulations—and the Court of Appeal told it that it was wrong. Because of the way in which the company conducted itself after it bought all the shares, it was caught by the regulations. Retrospectively, it found that it should have been obliged to follow the regulations.

Jonathan Djanogly: The hon. Gentleman makes exactly the point that many Conservative Members have been making. Even if there is a share sale, it does not discount people's existing rights, particularly in relation to unfair dismissal and redundancy.

David Kidney: Obviously, I do not agree, because the rights involved are specific to a transfer situation and are provided by the TUPE regulations and not by general law. My point is that those who think that they are safe from the TUPE regulations might find themselves caught by a subsequent court action. That is an uncertainty in the market from which I would have thought that business people would want to be free. If we make the position clear in law by adopting my hon. Friend's Bill, we will do them a favour too, although I repeat that my prime focus is to do a favour to those whose jobs are at stake and who are worried when such a takeover takes place.
	Lastly, paragraph 7.3 of the explanatory memorandum to the 2006 regulations states:
	"The Government considers that, ideally, everyone should know where they stand when a business sale or reorganisation, or a contracting-out or similar exercise, takes place, so that employers can plan effectively in a climate of fair competition and affected employees are protected as a matter of course."
	I agree entirely with that statement, and adopt it as my idea of what is fair in such a situation. That is why I support the Bill.

Jonathan Djanogly: I disclose my interests as a partner in a law firm that acts for various private equity firms as well as for employees made redundant by companies in which private equity has invested.
	The Conservative party opposes the Bill, which is unnecessary, misguided and would have an extremely negative impact on the UK's position as an attractive place to do business. The hon. Member for Nottingham, East (Mr. Heppell) professes to be no expert in this area, and not to understand some of the details of the Bill. That prompts the question: who does understand the Bill, who has drafted it, and who is really behind it? He was also honest in that regard, in saying that it was Jack Dromey. I shall return to the unions' position on the Bill later.
	The Bill would extend the application of the Transfer of Undertakings (Protection of Employment) Regulations 2006 to the acquisition and disposal of substantial shareholdings by private equity companies. However, in practice, it would extend far beyond the realms of private equity and is an issue of major concern for all types of companies in this country. The United Kingdom is a major location, if not one of the principal locations, of choice for international business, not least private equity transactions. The hon. Gentleman says that he is not picking on private equity, but he must realise that his Bill, or rather Jack Dromey's Bill, is a savage attack on the private equity industry. I think it right, therefore, that some Members, including my hon. Friend the Member for Shipley (Philip Davies), have chosen not to underestimate the sector's importance to this country and, indeed, to other countries—countries that would welcome an end to private equity investment in the UK as a result of the Bill.
	Private equity has existed in this country for more than 20 years, and according to Treasury figures has invested more that £75 billion worldwide in 22,000 businesses during that time. The British Venture Capital Association puts the figures at nearer £80 billion and 29,000 businesses since 1984. The size and scope of the UK's private equity sector is now second only to that of the sector in the United States. In 2005, 1,500 companies were financed by private equity in the UK, and there were 20 deals involving more than £250 million. In 2006, BVCA members brought more than £10 billion-worth of investment to the UK, and private equity-owned businesses generated sales of some £420 billion and paid the Treasury £26 billion in tax. Last year another 1,300 companies received investment from private equity.
	About one fifth of the private sector work force are now employed by a private equity-owned business. As was noted by my hon. Friend the Member for Shipley, a survey carried out last year by the  Financial Times revealed that the 30 biggest private equity deals in 2003-04 created 36,000 more jobs than they cut. Three quarters of those new jobs were created by the organic growth of the companies, and private equity-owned firms have outpaced public companies in employment growth. Over the past five years the number of jobs in private equity-owned companies has increased by 9 per cent. per annum, compared with 1 per cent. in the FTSE 100. According to the recent study by the World Economic Forum, which was mentioned by my hon. Friend, private equity-owned firms are responsible for 60 per cent. more greenfield job creation than their peers. Greenfield jobs are defined as jobs that would not otherwise have been created. In other words, private equity-owned companies create more jobs than other businesses.
	My hon. Friend also made the important point that, following investment, privately owned companies are by nature not as easily traded or sold as public companies. That means that private equity will almost invariably invest on a long-term view—say five years—rather than a short-term view. Private equity firms employ around 5,000 people in the UK in financial services, helping to generate £3.3 billion in fees for supporting organisations. That amounts to more than 7 per cent. of the total annual turnover of the UK financial services industry. It is therefore of the utmost importance that the sector is not sent packing overseas for no good reason. This country's light-touch regulatory approach is recognised as key to attracting the industry to the UK, and legislative change must not compromise such an important part of the UK's economy.
	The hon. Member for Nottingham, East asked "Why not?" My first answer is that the Bill is technically unnecessary. That view is even supported by the European Commission, which concluded in June that there was no justification for extending TUPE to a change in ownership of shares. TUPE regulations were updated as recently as last year, as many Members have pointed out. However, the updates make no alterations to the well-established principle that TUPE need not apply to share sales. Notwithstanding what was said by both the hon. Member for Nottingham, East and the hon. Member for Stafford (Mr. Kidney), in a share sale the employer does not change, and therefore the employee's terms and conditions of employment do not change either. Accordingly, the employee retains his or her existing employment rights, which are no more and no less than they would be if the sale had not taken place. I repeat: the employee is in no worse a position.
	If job losses were incurred as part of the sale process, or after it—for example, if there were asset stripping—the employee would have the same rights as they had when the company was owned by the previous shareholder. Any dismissal would automatically be unfair unless the appropriate regulatory procedures were complied with. Let us be clear: existing legislation already dictates that an employer cannot unilaterally vary a contract of employment. Changes to individual terms and conditions such as pay, hours and holidays can be achieved only through agreement with the employee.
	TUPE was enacted with the specific purpose of giving employees of a business who are transferred to a new business in a non-share sale similar rights to employees in a share sale. The hon. Member for Solihull (Lorely Burt) made that point, and it would be bizarre to reverse the process. The extension of TUPE to share sales is therefore unnecessary and irrational, and we do not see how that position has changed. An extension of TUPE would not add significant additional protection, but would lead to more complex and lengthy transactions, ultimately damaging the UK economy.
	The Bill's proposed new measures go significantly beyond the provisions in TUPE, and would be considerably more onerous and restrictive than existing legislation. I appreciate what the hon. Member for Nottingham, East said in that regard, but that is the nature of his Bill. We believe that such provisions are a thinly disguised way for the trade unions to exert more influence on mergers and acquisitions transactions in the UK. That of course implies that the subject matter of the Bill really has nothing to do with private equity, as TUPE affects all business sales. I suspect that private equity has been inserted as the proposers believe that inserting a whipping boy is likely to increase interest in what actually is a pretty poor idea.
	The hon. Member for Solihull set out the many reasons why the unions do not like private equity. To that extent, the Bill could be called a Trojan horse. Clause 3 goes beyond existing TUPE law by seeking to institutionalise the role of trade unions. At present, under TUPE any collective and recognition agreements will remain in force following a business transfer. Alongside that, any rules for varying, terminating, rescinding or altering matters after transfer also remain in force. However, the Bill seeks to make it impossible to make such amendments following a share transfer, as any changes for reasons related to the transfer would be automatically void unless economic, technical or organisational reasons could be proved. That, therefore, gives trade unions a shield on a share sale and creates the double standard where it is more favourable for buyers to buy a business than to buy shares in the company that holds the business.
	Clause 4 provides that information be given to employee representatives such as trade unions before the parties agree that a share sale is to take place. It also gives them the right to commission an expert study, give a formal opinion and receive reasoned response prior to any share sale. Such an expectation is wholly unrealistic. It would result in a dramatic slowing of the transaction process, and potentially give trade unions the power to delay transfers almost indefinitely. The clause places a further onerous obligation on the acquirer in a share sale to disclose five-year business plans on the business it is acquiring.

Christopher Chope: I congratulate my hon. Friend on a very good demolition job. Will he illustrate his last point by reference to what is alleged to be happening in France, where the planned merger between GDF—Gaz de France—and SUEZ has been delayed by more than two years through the employee representative's refusal to provide an opinion as required by French law? Would we in this country not be in exactly the same position if this Bill were enacted?

Jonathan Djanogly: My hon. Friend gives a good example, to which I had intended to refer. He is right that there would be the same severe implications in this country. It was asked earlier what would happen if Northern Rock had been sold by way of a private share sale, to the Virgin bidder, for example. That did not happen, of course, but if this Bill had been enacted it would have significantly delayed the sale, leading to extra uncertainty—and certainly also to more worry for the staff concerned, rather than less. As my hon. Friend the Member for Shipley said earlier, in his usual forthright manner, we are not here to support the rights of workers whose work is going to end.
	These obligations would be unworkable in a competitive, globalised marketplace that relies on rapid decision making. Moves to exercise such constraints on the UK labour market would inevitably stifle the UK mergers and acquisitions industry, risk damaging London as a worldwide financial centre, and drive investment capital away from British shores into the hands of rival economies.
	These measures are also unnecessary in the context of employee protection. Employment legislation already requires information and consultation with employee representatives, including trade unions, at least 30 days in advance if 20 or more job losses are envisaged.
	The CBI has said that it does not support the Bill, which it believes would be damaging to private equity firms and, potentially, to many other businesses, compromising broader economic success and job creation. The hon. Member for Manchester, Central (Tony Lloyd), who has perhaps now gone to the Library to do his research, queried the CBI's view that the provisions would create uncertainty. They would do so because the sale process would be impeded and delayed, thereby creating uncertainty over the outcome and more concern for staff. To reinforce the point made by my hon. Friend the Member for Shipley, let us not have any quibbling about the fact that the British Private Equity and Venture Capital Association—the BVCA—has strongly opposed the Bill.
	Clause 5 allows for an injunction to be taken out to prevent a share sale if trade unions are not consulted. That does not exist even in TUPE, and it would be a disastrous measure for the UK's mergers and acquisitions market. The hon. Member for Nottingham, East said that he wanted to strip out such extras, but I have to tell him that to do so would take him back to the existing law. That leads us to ask why we need the Bill. The timeline of any mergers and acquisitions deal would certainly be delayed while trade unions were elected and consulted, and much uncertainty would enter the process as a result.

Christopher Chope: Does my hon. Friend accept that the promoter of the Bill has now said that he does not wish the injunction provisions in the most recent draft of the Bill to apply? Does my hon. Friend take succour from that, in that it shows that the mood is changing on the Labour Benches and becoming more welcoming towards the whole principle of private equity?

Jonathan Djanogly: I agree with my hon. Friend. It seems to me, having listened to the debate so far, that a Bill has been presented that was perhaps drafted by others, and that the amount of thought that went into it before it was presented was not as much as should have been the case. I regret that, because the implications of the provisions for British business are very significant, and because of the upset that the Bill has caused among business organisations, for what I see as very little benefit for employees' and workers' rights. For those reasons, I think that it would have been better if it had not been presented.
	The scope of the Bill is uncertain. Although it claims to address issues of job insecurity following private equity takeovers, the fact that it leaves it to the Secretary of State to give a definition of "private equity" makes that an impossible task. Private equity is a highly problematic area to define, and—as my hon. Friend the Member for Christchurch (Mr. Chope) pointed out—there is much dispute, even within the industry, on its parameters. For example, there is much debate on whether it includes venture capital or small innovation businesses, let alone business angels investing alone.
	The hon. Member for Nottingham, East's famous explanatory notes—which I have now had a look at; I thank him very much—confuse the issue even more. Paragraph 4 defines private equity organisations as
	"companies whose shareholdings are not listed on a recognised stock exchange".
	I do not understand the sense of that, not only because there are listed private equity companies, but because it was this Government who put in place the tax measures to encourage people to invest in them. I shall be interested to hear the Minister talk his way round that one.
	The uncertainty surrounding the definition of private equity leads to a very real danger that other UK companies will be caught by the Bill. If that happened, the ability of such companies to conduct business in the UK would be extremely inhibited. Again, businesses would be driven abroad, which could be extremely damaging to our economy. TUPE law is highly complex and frequently misunderstood. Extending it to share sales would create uncertainty that, in turn, would erode buyer confidence that profitability in a takeover target's business could be restored and value derived from its investments.
	The trade unions must be prevented from slowing up the UK's mergers and acquisition transaction process and wrapping up our flexible labour market in red tape. Only two weeks ago, a huge union-led Labour Back-Bench rebellion in this place forced the Government to review their previous opposition to increased employment rights for temporary and agency workers. Since 1997, and having taken on the EU social chapter, the Government have introduced some 18 Acts and more than 280 statutory instruments that deal directly with employment regulations.
	Despite business representatives increasingly speaking out against the growing burden of regulation and the resulting erosion of Britain's competitive advantage, the process of reducing our competitive advantages is now actually accelerating. The impact has been to increase the complexity and burdens on employers while strengthening both trade union and employee rights. This Bill represents a further attempt by unions to push the Government—the Labour party now receives more than 70 per cent. of its money from the unions—into passing laws to make the UK's labour market significantly less competitive. That is a further turn of the Warwick agreement ratchet and we had all better wake up to what is going on before that process kills innovation and job creation in our country.
	This Bill is a further example of unnecessary meddling in business practices. It is technically unsuitable and economically misguided. If passed, it would be hugely burdensome for UK companies and would bring unlikely benefits to employees. Accordingly, we shall oppose the Bill today.

Tom Clarke: When I read the Bill of my hon. Friend the Member for Nottingham, East (Mr. Heppell) last night, I was not anticipating the sort of debate that we have just had. To be frank, I had not realised that Huntingdon and hyperbole went so well together. We have had gross overstatement from Conservative Members, compared with the innate decency in my hon. Friend's presentation of his Bill in his excellent introductory speech. That decency is reflected in the measure that he has put before the House—a measure inviting a Second Reading.
	We have heard much talk about parliamentary procedure, and I note that one hon. Member spoke for well over an hour, although he is no longer in his place. Yet "Erskine May" tells us that on Second Reading, we have the right to look at and examine a Bill and know that at later stages in Committee and on Report—

Nigel Evans: rose—

Tom Clarke: I am not giving way; I did not intervene on anyone else and I am going to be brief. I am not going to talk out my hon. Friend's Bill. I hope that if, for some reason, the Bill does not make its way through the normal parliamentary stages, there will be continuing discussion between the Minister, in whom I have enormous confidence, and people who understand what modern industry at this stage in the millennium is actually about, as opposed to the prejudices and ideology to which we have been subjected over the last couple of hours.
	The Bill is, I believe, based on fair play—something that the British people recognise. Things have gone very badly wrong with industrial relations in Britain when that fair play does not exist, whether on one side of industry or the other. In my view, my hon. Friend the Member for Nottingham, East is trying to do the decent thing in industrial relations. He has looked into TUPE and recognised that, by and large, it is working well, but there are defects that can be put right. That seems to me a reasonable approach. My hon. Friend the Member for Stafford (Mr. Kidney) made the important point that TUPE is evolutionary and that there have been changes to it. Most of what I have heard about it has been positive, but when things have gone wrong, we have tried to correct them. Here we have a very decent little Bill, which would do exactly that in the case of private equity transactions.
	I shall address some of the points that Opposition Members made before I turn to the positive aspects of the Bill, which will be recognised as such in my constituency. I was frankly astonished when the hon. Member for Shipley (Philip Davies) said that employment legislation was about giving people the opportunity to work. It was as though the quality of work did not matter and exploitation would be acceptable at this point in our industrial history. It was pretty much the old-fashioned idea of "hands wanted", beyond which nothing much mattered. I thought that we had made progress since those days.
	The hon. Gentleman's argument was also advanced in the debates on the 2006 regulations, but there has been no evidence to justify it since. Indeed, the same argument was made against the proposal for the minimum wage. It was argued that all we should do was give people jobs—period. People said that our proposals would mean the loss of jobs, but there is not a shred of evidence that that has happened. Those arguments are no more valid now, when used to oppose this excellent little Bill.
	The hon. Member for Huntingdon (Mr. Djanogly), the Opposition spokesperson, endorsed the view of the hon. Member for Shipley. At this stage in our history, when we are seeking partnership and agreement between employers and employees, he made an outright attack on the trade union movement. I could hardly believe my ears. I thought that the modern Conservative party knew about the demands of the modern world and wanted to respond to them. That was not what we heard this morning, and it is not what my hon. Friend the Member for Nottingham, East was entitled to expect.
	In this little measure, my hon. Friend proposes protection. It is not unreasonable to ask for protection for my constituents who have done shift work, year after year, in appalling conditions. They have contributed far more to companies that have been taken over than some of those involved in private equity have. I do not include all those involved, because I have no desire to attack private equity concerns in the way that the trade unions were attacked by the Opposition at the Dispatch Box. However, there have been abuses, of which I shall shortly give an example from my constituency.
	When there are abuses of employment law, we in Parliament have a responsibility to put them right. Some Members give the impression that that is not our role. I have enormous respect for colleagues on both sides of the House, but people who are following the debate will say that we have not done a bad job of protecting our own employment rights, including our pensions. We must act when there is evidence that private equity concerns with a controlling interest have ignored representations from trade unions—or from employees' representatives if there is no trade union, which I find unacceptable.

Jim Sheridan: Does my right hon. Friend agree that the fundamental effect of the Bill is to provide basic support and conditions for workers, some of whom have probably spent most of their lives building up companies until they are profitable, just for some spiv to come along and take their livelihood away from them?

Jonathan Djanogly: Pot, kettle?

Tom Clarke: My hon. Friend the Member for Paisley and Renfrewshire, North (Jim Sheridan) is absolutely right. I know what a contribution he has made to British industry—to working for partnerships between employers and employees. If the hon. Member for Huntingdon does not mind, I am happy to listen to what my hon. Friend has to say. He refers to real issues; there have been situations in which, following a transfer of equity, there were variations in contracts and dismissals, and collective agreements were dismissed and thrown out of the window. In some cases, the right to preservation of trade union recognition—something that I thought was accepted in all parts of the House—has been dismissed. In light of that, it seems perfectly reasonable for us to at least consider the issues, and the Bill introduced by my hon. Friend the Member for Nottingham, East allows us to do so.
	I make no apology for defending the rights of the work force. The Conservative spokesman, the hon. Member for Huntingdon, appeared to dismiss the fact that we have a responsibility, which I found incredible. Of course we have responsibilities to employers, large and small, but equally we have a responsibility to work forces who have contributed to the success of British industry and commerce that we have been discussing. Dismissals are very frequent in the situations that the Bill addresses.
	I recall a local firm in my constituency called RB Tenant, which was headed by the local provost. When I became provost myself, and worked with my MP colleague, the late Jimmy Dempsey, there was never any problem about being invited in for a cup of tea and a chat about how the company was going. We could meet the unions and the work force. When the firm was taken over by Sheffield Forgemasters, by and large the same atmosphere prevailed. Sadly, when there was a much bigger takeover by an American concern, resulting in dismissals of the kind that my hon. Friend the Member for Nottingham, East mentioned, the Member of Parliament was not even allowed to pass the door. There were huge numbers of dismissals. I stood at the company gates while men who had given 20 or 30 years of service left in tears, having been thrown out. They were not told a word about the future of their pensions. Am I supposed to say that we ought not to do anything about such problems, and that if we do, we are upsetting the balance that has been established, with a lot of help from TUPE, in British industrial relations? I believe not.
	The Bill is about genuine partnership, and about providing information and consulting after post-equity transfers. It is about talking with trade unions. Yesterday I had a brief conversation with Jack Dromey, and his description of the Bill, and his attitude to modern industrial relations, did not bear any relation to what I heard the hon. Member for Huntingdon say. To take up a point made by the Liberal Democrat spokesperson, the hon. Member for Solihull (Lorely Burt), it is perfectly reasonable to provide for the representation of employees in cases where trade unions do not exist. There is nothing particularly radical or challenging in that. That is the sort of measure that the Bill would introduce.
	I would certainly welcome the Bill completing its various stages and emerging as an Act, but if that does not happen, my hon. Friend the Member for Nottingham, East should still feel that he has done an enormous service to industrial democracy and decency in this country, and I am sure that my hon. Friend the Minister will respond to the debate in that spirit.

Nigel Evans: I congratulate the hon. Member for Nottingham, East (Mr. Heppell) on his success in the private Members' ballot and on introducing a Bill that he believes will do some good for the rights of British workers.
	I was a little disappointed that the right hon. Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) refused to take my intervention. He suggested that all that was being asked was that the Bill be allowed to go upstairs, where it could be kicked about a bit to see what impact it would have. I have been successful in a few private Members' ballots, but only one Bill was enacted, and that was because it had the support of a Conservative Government. An enlightened view was not taken on my other Bills because the Labour Government were not interested in giving them a fair wind. If the right hon. Gentleman looks at his voting record on Fridays, he might find that he voted with the Government not to send private Members' Bills upstairs for them to be dissected and considered. We know that private Members' Bills are an opportunity to introduce a measure that the promoter would dearly love to be enacted, but that is contingent on the Government's view, which is why we wait with bated breath to hear whether the Minister believes that the Bill should go upstairs to be operated on—it appears that it will require extensive surgery—and resuscitated in a form that can still walk and breathe. I suspect not, from what I have heard this morning.
	I have mentioned Brussels a few times. I suspect that this week we have witnessed another takeover of this place by Brussels, yet I see no protection of the rights of the British people in the form of a referendum. However, I put that to one side. For measures such as this Bill, what happens in Brussels is important. Like my hon. Friend the Member for Shipley (Philip Davies) and the hon. Member for Nottingham, East, I would far prefer to see us enacting legislation that we think is important, so the sovereignty of this House is important. At the same time, we must recognise that the powers that we have shifted to Brussels and those that it has taken to itself over the years mean that we could legislate in one area, but Brussels could then propose something similar or completely different. We need more investigation on that.
	As my hon. Friend the Member for Shipley said, colossal sums are being shifted around—far more than I can even pretend to understand—and some of that is pension fund money in which trade unions invest. The pensioners who will be in receipt of the money that is invested will have been workers and will not want their investments to be abused in such a way that workers' rights will be denied. We should have a fuller understanding of exactly what funds and investments we are discussing. Some of the investments are long term; they are not about getting in, doing some damage and seeing how much profit can be made before getting out, without due deference to the investments made. As I said in an intervention, in many cases investments are made in businesses that are believed to be going concerns, and the last thing anyone wants to do is meddle with the business or change it any way, shape or form.

Philip Davies: I agree entirely. A private equity firm gave £1 million to Remprobe, one of my local firms, which makes software to help firms monitor their energy consumption, and helped it to develop its product for supply to large corporations. Such companies are helping smaller businesses and their workers, not being a hindrance.

Nigel Evans: If the hon. Member for Nottingham, East has done one great service this morning, it is giving us an opportunity to talk about the impact of private equity on this country. I am a poor, simple boy from Swansea; I should not understand these things, but I have had an education this morning about the importance and value of private equity.

Philip Davies: My hon. Friend has more money than a private equity firm.

Nigel Evans: I wish.
	The Government think that pre-legislative scrutiny is a good idea. I was not so sure to begin with, but I now think that it has merit, and that applies to private Members' Bills, too. It is important that we consult all the organisations that would be affected by any Bill proposed in the House. We should know the view of the Institute of Directors, the CBI, the Federation of Small Businesses and the trade unions. Of course, we should get in the trade unions and find out what they have to say about such legislation, too.
	The right hon. Member for Coatbridge, Chryston and Bellshill spoke with passion about some of the abuses that have taken place in firms that he is familiar with. Those abuses should be driven out of the system. We must protect the rights of workers who feel that they are powerless against people who exploit them for no merit other than simple profit and who have no interest in employees who help to make the company's profits. I believe 100 per cent. in all that and endorse it. We must be enlightened. Companies that recognise the value of the people who work for them—the people who create the wealth from which employers derive their profits—are the very ones that invest in their workers, recognise the people who help them and consult them as a matter of course, not because they must do so under legislation but because it is the right thing to do. Therefore, I very much believe that, where abuses exist, they should be exposed, and if it takes legislation to get rid of them, that is exactly what should happen.

Philip Davies: I am very reluctant even to try to suggest that I might disagree with my hon. Friend, but does he agree that the most successful companies in the world tend to have one thing in common—they are very good at looking after their staff and employees—and do not need Government legislation to understand the merits of looking after one's staff?

Nigel Evans: I find myself in a similar position to my hon. Friend at the beginning of the day, when he felt that our hon. Friend the Member for Christchurch (Mr. Chope) was disagreeing with him when he was not. I was afraid that my hon. Friend would disagree with me, but he has not done so. We all agree, and we all know of examples of firms in our constituencies that are enlightened, value their workers and invest money in their long-term life education in matters that do not directly relate to their businesses.

Christopher Chope: May I give my hon. Friend an example from my constituency, where a partnership whose results are in the papers today—the John Lewis Partnership, coupled with Waitrose—took over the local branch of the Co-op in Christchurch and created a lot more jobs, business and wealth as a result?

Nigel Evans: If I have read it right in the papers as well, that business is sharing about £180 million with its workers. I do not think that any legislation says that it needs to do that. I hope that I have the figure right. I suspect that anyone who works for the John Lewis Partnership who is listening also hopes that I have got the figure right. Those workers will benefit greatly from the wealth that is being created there.

Stephen Pound: I am extremely grateful to a poor, simple boy from Swansea for giving way. I appreciate that the hon. Gentleman has a vast commercial enterprise in south Wales. He might well be one of the most enlightened and benevolent of employers, but can he not realise that, by speaking of good employers, he is not denying the existence of the bad? What we are talking about today is a critique not of all private equity companies or all employing organisations, but of some of them, and some workers, frankly, need protection.

Nigel Evans: I agree with the hon. Gentleman that we must seek out those employers—I hope that they are a small group, but we have to accept that they exist—who are nasty, who want to pay their workers as little as possible and who give them no rights whatsoever. They are not helping the British economy. They may be trying to help themselves, but they will get that wrong, too. I suspect that the productivity of those who work in enlightened firms is much higher than that in firms where employees are abused.
	I hope that when the Minister replies, he will say whether he believes the Bill is necessary at all. We have heard what the CBI said, and what my hon. Friend the Member for Huntingdon (Mr. Djanogly) said about existing protections. I joked with my hon. Friends about the £3 million bus that we discussed last week, which is being used to tell workers about their right to the minimum wage. Perhaps it should be used to tell them about other rights, if those rights have been abused as some hon. Members believe. Perhaps the scheme can be extended to give more information to workers.
	I, too, believe in fair play for workers, but we must look at the unintended consequences that the Bill would have. The UK is one of 27 countries in the European Union. We call them our neighbours, laughingly, but they are competitors just as much as they are our neighbours. We must make sure that we do not disadvantage any firms in the UK with legislation that will end both the flexibility that the Government have tried to achieve for them and our competitive advantage. We must recognise the growth of firms in Asian countries. This week, I was fortunate enough to the meet the Prime Minister of Vietnam, which has recently enjoyed 8 per cent. growth. I learned that Vietnam has managed to take more people out of poverty than any other country, and it is important that we acknowledge that.
	We have to compete with such countries, but not on conditions. Hon. Members should not get me wrong: it would be awful to think that we could drag the rights of our workers back to the standard that exists for workers in other parts of the world. That is something that we simply do not want to do.

Philip Davies: My hon. Friend is making a powerful point. Does he agree that we have fairly high levels of rights in this country, and it would be counter-productive to pile more burdens on to businesses, which would stop them investing in UK and lead them to invest in countries such as China, with the consequence that the workers in those businesses would have much lower protection in the workplace than they would in the UK under existing legislation?

Nigel Evans: My hon. Friend makes a valid point: not only would we export jobs but we would abandon the protection for workers in the UK. He, too, made a powerful point, as it is far better to have a job than no job, but that does not mean having a job at any cost.
	I take on board what the right hon. Member for Coatbridge, Chryston and Bellshill said about workers' rights, but that does not mean that people should be in a job and beaten every half hour and given a bowl of rice. That is totally unacceptable, but no one is arguing that that should be the case.  [ Interruption. ] Even my hon. Friend the Member for Shipley does not argue that; to suggest otherwise is an abuse of his views. However, he can protect himself far better than I can.
	We have spoken about the importance of the number of jobs employing people directly in private equity firms. The UK is one of the world's financial centres. Time and again, the Opposition are reminded that they opposed the minimum wage, and that all the predicted doom and gloom on the minimum wage has not come about. However, for good measure, may I toss this one back? We were told that if the UK did not join the euro it would be a disaster for our financial institutions. We did not join the euro, and we have some of the strongest financial institutions anywhere in the world. Private equity firms are part of that. The City of London certainly benefits from them, but so too do the regions. I suspect that many people in Scotland work in private equity firms that operate from Scottish cities and towns. Those firms employ people at different levels, and the private equity that they can draw into Scotland benefits that country.

Stephen Pound: rose—

Nigel Evans: That leads me nicely to devolution, but before I do so, I shall give way to the hon. Member for Ealing, North (Stephen Pound).

Stephen Pound: I am grateful to the hon. Gentleman for giving way, particularly when he is tossing things in our direction with such frequency. Although I recognise his superiority in that field, does he accept that it would be logical for him, while he is in this laissez-faire vein, to dissociate himself from any suggestion of taxing non-domiciled residents in the United Kingdom?

Nigel Evans: I understand that that is a movable feast as far as the Government are concerned, and I should hate to intrude on private grief. I look forward to 12 March, when perhaps the Chancellor of the Exchequer will finally be able to tell us exactly what is going to happen.  [ Interruption. ] He will not be in purdah on 12 March, and I rather hope that he will be able to tell us exactly what is going on. As for non-doms in this country, I suspect that what they want is a bit of certainty. They want to know exactly what sort of taxation the Chancellor—he is the person in charge of this—is considering. They want to know exactly what impact the Budget or any announcements that have been made in the past will have on them, just as any workers who would be affected by this legislation will want to know what impact it would have on them.
	That brings me back to devolution. As I understand it, the Bill covers the whole of the United Kingdom, so it would be useful to find out the views of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly and whether they would want to have an input into it, deviate from it, or try to have a complete derogation from it. That is where pre-legislative scrutiny would have been interesting.
	We have two other private Members' Bills before us, both of which are cross-party on the basis of their sponsors. If the hon. Member for Nottingham, East thought that his Bill was so good and wholesome, it is a bit disappointing that he was unable to find somebody from another party to share their support for it. I do not know whether he asked any Members from other parties or just asked his mates in order to get the 10 signatures needed to take the Bill forward. I always think that it is somewhat better for a private Member's Bill, if it is to have any chance of getting through whatsoever, to have not only Government support but the support of the whole House.
	I am waiting to hear what the Minister says before I finally decide whether I can support the Bill. I want to see the same sort of protection for all the workers in this country as the hon. Gentleman does, but I do not want to see any unintended consequences that may damage their rights.

Patrick McFadden: I congratulate my hon. Friend the Member for Nottingham, East (Mr. Heppell) on his success in the private Members' Bills ballot, and on raising the topical issue of takeovers and their impact on employees. He was kind enough to thank me for discussions that we have had, and I am sure that hon. Members on both sides of the House will join me in paying tribute to him for the honest and open way in which he presented the issue. I appreciate his long-standing interest in the condition of people at work. I know that he believes in decency and fairness in the workplace, and that that is the motivation behind the Bill. In particular, he wants to ensure that there is fairness when circumstances beyond the control of the employee change and have an effect on his or her employment situation. My right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) spoke with passion about the impact of such change on his constituents.
	The backdrop to the Bill is increased public interest in the impact of private equity investments in the economy and, in particular, any impact that they may have on terms and conditions of employment. As a result of the Bill, and the debate, there are several questions before us. Where should the TUPE conditions apply and in what circumstances? If the Bill extends those conditions, would it do only that, or would it do more that that? I fear that in several respects it would do more. My hon. Friend the Member for Nottingham, East posed the question whether employees whose company has had a large injection of capital, or has been bought or sold by private equity investors, would benefit from further TUPE protections beyond those already afforded under existing legislation. There is also the legitimate question whether the proposals in this Bill, which allow for extra regulations to govern the process by which companies may be bought and sold by private equity companies, would result in companies being less able to compete and thrive, or be rescued through takeovers, in what is a competitive global economy.
	I will return to the Bill in more detail, but I would like to begin by setting out some facts about the current situation in the UK labour market. Over the past decade, our record has been, on the whole, a highly successful one. The UK labour market has become one of the most successful in the world, with more people in work than ever before. Some 2.7 million more people are in work now than a decade ago, and at almost 75 per cent., the UK has the highest employment rate in the G7. The unemployment rate remains relatively low in historical terms, at 5.5 per cent., which is the lowest rate among all our major competitors, except Japan and the US—well below the average for the European Union.
	One reason for that success has been the fact that our labour market combines flexibility and decent minimum standards in the workplace, and the TUPE regulations are part of those standards. Other key protections include the minimum wage, paid holidays, anti-discrimination policies and so on. We have introduced that foundation of standards without damaging the economy and without deterring inward investors.
	We have an open market economy that allows companies to meet the challenges of globalisation and competition. Over the past 10 years, we have made real progress in maintaining stability and in allowing companies to make long-term decisions while knowing that the economy is run on a stable basis. Even given such national economic stability, there can always be uncertainty in a world where companies are bought and sold, where investment moves across borders and where technology and increasing openness in world economies enables outsourcing and international production processes that would not have been possible even in the relatively recent past.
	Whatever the uncertainty, open engagement with globalisation is the approach that will maintain our economic success in the long term. Of course, that approach is not without its challenges. There is a need for the Government to ensure a fair labour market with rules to ensure the decency that has been spoken about, and to guard against the exploitation of the vulnerable. In putting that framework in place, we must ensure that business and enterprise can continue to flourish.
	We have to acknowledge that although we hope that businesses will flourish, we know that some will fail. That has always been the case, and we have to support the process of risk-taking and entrepreneurship that is essential to the economy, while always equipping workers to be adaptable and able to cope with change, which is moving at a faster pace than ever before. A manifestation of the flexibility that characterises our economy are the dynamic capital markets and investment processes, of which private equity is a relatively small but important part. In introducing the Bill, my hon. Friend acknowledged the valuable role that such investments can have.
	The first question is whether the Bill would protect employees in circumstances where private equity has made an investment in the company that they work for. We have heard examples of how employees can bear the brunt of private equity restructuring. Those examples referred to job losses and poorer terms and conditions for employees. That argument—especially in the context of the Bill—contends that that would not happen, or at least that the effects would be minimised if TUPE were extended to those circumstances. However, it is important to remind ourselves what the exact purpose of TUPE is.
	The TUPE regulations implement the acquired rights directive and apply when a business or part of a business is transferred from one employer to another. That is the material point—the regulations are about the change of employer. Under the terms of TUPE, employment continues with the new employer, and employees have the same terms and conditions and continuity of service as with their old employer. That is necessary, because without the TUPE provisions, employees whose jobs were transferred from one employer to another would not have an employment contract at all. They would have to go to their new employer to ask for a job. When it comes to share transfers, however, the identity of the employer does not change. The employees' contract of employment is still valid and cannot be altered without the agreement of both the employee and the employer, exactly as in any other employer-employee relationship.
	What, then, of redundancy? Are the jobs of employees who are subject to TUPE always protected in the event of a transfer? As this debate has showed, that is not the case. The TUPE regulations recognise that redundancies in restructuring after a transfer can be necessary for the business. The TUPE regulations allow redundancies to occur for an economic, technical or organisational reason, or for reasons unconnected with the transfer. Restructuring can occur if it would make a business more attractive for sale, for example. What TUPE ensures is that length of service is taken into account should employees be made redundant for an economic, technical or organisational reason. As employees have a contract in the case of a share transfer, their length of service is recognised already, so they would not need the extra provision.
	What of the other provisions in the Bill, which are designed to ensure that employees are informed and consulted? As I have said, some aspects of the Bill go further than TUPE. I fear that that might be true of the some of the information requirements in the Bill, particularly in respect of information on the prospects for the company over the next five years. Even if such information could be given accurately, that requirement would place an additional burden that does not exist currently. The Bill also suggests that employees and their representatives must be given sufficient time to get advice on the merits of the transfer and would allow for back-and-forth exchanges on such issues. That could take a significant amount of time and could add extra uncertainty for employees. Sometimes a takeover may, in fact, be a rescue, making it necessary to proceed with some speed.
	The Bill also sets out what the outcome should be if that procedure is not followed. I appreciate that my hon. Friend has said that he had further thoughts about the process since first drafting the Bill, but as it stands it says that the employees or their representatives could go to the High Court to ask for an injunction. That would be a new situation, where we would be asking the courts to decide whether an investment in a company should go ahead. Those provisions, taken together, could significantly inhibit necessary investment in the economy, and in some situations could work against the interests of employees, rather than in their favour.
	Of course information and consultation are important, and regulations are in place to deal with that. The Information and Consultation of Employees Regulations 2004, which I shall speak of later in more detail, went a long way towards ensuring that employees are properly consulted and informed about changes to their company, by allowing employees in companies with, at first, more than 100 employees—soon to be 50—to ask for information at any time. The Government put those regulations in place to ensure proper consultation of employees in all companies. However, if the Bill was enacted, what would be the outcome if a TUPE transfer was also a share transfer—that is, if one company bought another and subsumed it into its main operations? Would the TUPE provisions allow for a one-off consultation about possible redundancies, for example, or would there be a much more comprehensive consultation that required the share investor to state all the relevant facts
	"in relation to the period beginning with the date the information is provided and ending 5 years after the date of the proposed transfer"?
	As has been said, there is no shortage of litigation with regard to TUPE. I fear that the Bill, certainly as it stands, would end up adding to the confusion, not only for the employers—the transferor and transferee—but, in some situations, for the employees as well.
	The hon. Member for Shipley (Philip Davies) spoke for some time. I am happy that he acknowledged much of the success of the investment environment. The OECD has rated the UK as having the lowest barriers to entrepreneurship of any major economy, and for the second year running the UK maintains its overall ranking, in a list of 178 world economies, as the sixth easiest economy in which to do business, according to World Bank benchmarks. The UK's ranking as an economy in which to start a business has improved from ninth place last year to sixth place this year. The World Bank also confirms that ours is one of the top two European economies in which to do business.
	The statistics on start-ups in the UK are good: we are the third best of the G7, behind the US and Canada. The UK business population continues to increase, and there are some 1,800 start-ups every working day in England and Wales. Business survival rates are also higher than a decade ago, with 92 per cent. of VAT-registered firms still registered after one year, and now over 1 million more people work in small and medium-sized enterprises than did seven years ago. We want to maintain that environment.
	One of the reasons behind the Bill is that, as a result of some high-profile takeovers, fears have been raised that private equity firms can be short-termist and impact negatively on jobs and investment in the companies in which they take an interest. That debate will continue long after today. However, whatever one may think of private equity in all types of businesses—those owned by private equity funds, small businesses or others—change is sometimes necessary. A takeover can sometimes be positive, leading to change that helps to reinvigorate a company and strengthen its prospects. Takeovers can mean long-term investment decisions that improve productivity and profitability, resulting in a stronger company. We should always remember that the alternatives can be worse.
	"Private equity" has become something of a catch-all phrase for many different transactions—from venture capital to helping budding entrepreneurs start a company, to the much more high-profile takeovers of companies which have been in the news. As in any field, some companies are good and others less good, but the Bill will not address that issue.
	I am sure that, as in other fields, most private equity companies are responsible employers and others are less so, but generally there is little hard evidence to show that employees are disadvantaged when their company is bought or sold by private equity. Indeed, although the evidence base, particularly as regards the UK and European private equity markets, remains weak, and the results are inevitably to some extent conflicting, some facts are beginning to emerge.
	Reference has been made to the studies carried out by Nottingham university. Studies from the Work Foundation and other institutions also show that although there can be an impact on employment in the first year after a leveraged buy-out, it often rises strongly thereafter. Far from being predators always out to make a quick buck, private equity firms can bring extra capital and new working practices to a company that is going through tough times. Although there can be job losses in the first year, the record can be better afterwards. Indeed, some of the investments are rescue efforts; it is also worth remembering that there are often job losses in the years leading up to a takeover, which suggests that the company concerned has not been in the best of health.

Christopher Chope: The Minister is making some excellent points, and I wonder whether he could use the good offices of the Leader of the House to arrange a meeting with Mr. Jack Dromey, to persuade him of the wisdom of his remarks.

Patrick McFadden: I am sure that the Leader of the House has more important business to deal with than arranging meetings for me. I may have something more to say about meetings later.
	As I was saying, the evidence does not show that private equity takeovers are always a negative or about making a quick buck. Private equity firms often hold on to companies for a lengthy period, to add value to their business before selling them on. The average is about three years, which is often longer than the average time for which institutional investors hold on to their shares. The recent study prepared for the World Economic Forum concerns mainly the American market. According to that study, while jobs might fall initially, over time more new greenfield—so to speak—jobs were created than jobs were lost. Rather than damaging companies, private equity investment often quickened the pace of restructuring, allowing jobs to be created and making the most of new challenges and new markets, as all good management must do.
	Let me now deal with how the TUPE regulations currently operate. As my hon. Friend the Member for Nottingham, East said, the TUPE regulations were revised in 2006, after extensive consultation, to give greater clarity to their provisions and to when they apply. Although there was always an attempt to adhere to the principle of allowing employers the flexibility and freedom to pursue economic activity, with fairness to employees, the review resulted in the regulations being extended to protect employees in transfers of the provision of services or contract provision, as well as in transfers of a business.
	As my hon. Friend said, private equity has hit the headlines recently, but there were not hugely strong demands to extend TUPE to private equity share transfers when the consultation took place. The revision did, however, include a provision to allow more flexibility when a company is subject to insolvency proceedings, allowing the Government to pick up the costs of redundancy, the underlying aim of which was better to enable the sale of insolvent businesses as going concerns.
	The hon. Member for Ribble Valley (Mr. Evans) asked a couple of times about the situation in Europe. The idea that share transfers should be included in the scope of the acquired rights directive was recently examined by the European Commission, which last year conducted a comprehensive review of the operation of the directive in all member states. The answers on the questionnaire of both member states and social partners were taken into account.
	The directive, which is based on article 94 of the treaty, is aimed at protecting business employees in the event of a change of employer, particularly to ensure that employees' rights are safeguarded. It works on the premise that there are differences between member states regarding the protection of employees in this area, and stresses the impact that those differences can have on the operation of the single market. Consequently, it concludes that it would be advisable to harmonise that protection. The Bill would go further than the provisions in the directive.
	The Commission stated:
	"The aim of harmonisation is twofold: to ensure comparable protection of employees' rights in the Member States and to approximate the obligations which the rules of protection place on European undertakings".
	The Court of Justice has indicated on several occasions that the rules of the directive are to be regarded as mandatory, in that it is not permitted to derogate from them in a manner that is detrimental to employees. Consequently, an employee cannot waive his or her rights under the directive, and those rights cannot be limited—neither with the employee's agreement, nor if the disadvantages resulting from renunciation are compensated in some other way.
	On 31 August the directive had formed the basis for some 44 judgments from the Court of Justice, 30 of which concerned its scope and, in particular, the concept of transfer.
	The European Commission's report added:
	"The transfer of ownership of the majority of the shares in an undertaking or a change in the majority of shareholders does not constitute a transfer because the legal personality of the employer is unchanged. The Commission considers that a revision of the Directive, extending the definition of 'transfer' to include a change of control, as proposed by the European Confederation of Trade Unions, is not justified at this stage. Although a change of control can lead to changes in the undertaking, the employee's legal position vis-à-vis the employer is unchanged. In any case, Directive 2002/14/EC4 (the information and consultation directive) makes such changes subject to appropriate information and consultation procedures."
	So the Commission's view was that such a change was unnecessary.
	The report also examined the workings of article 7 of the directive, which concerns the obligation to inform employees in the event of a transfer. That is a major part of the Bill. Under article 7, both the transferor and the transferee are required to supply certain items of information to the representatives of their respective employees. Whereas the obligation to report is general, the obligation concerning consultation is limited. The latter obligation exists when the transferor or the transferee envisages any measures in relation to the employees, for example a reduction in the work force.
	The consultation takes place
	"with a view to reaching an agreement".
	Member states are required to take all appropriate measures to ensure that the representatives of employees are appointed with a view to ensuring the provision of the information and consultation referred to in article 7. The directive gives member states considerable latitude when defining the procedures for nominating employees' representatives, and the obligations apply irrespective of whether the decision resulting in the transfer is made by the employer or by an undertaking controlling the employer. The report concluded:
	"Nearly 30 years after its adoption, the Commission believes that Directive 77/187/EEC continues to play a key role in protecting employees' rights."
	Let me now say a little about what private equity itself is doing. As my hon. Friend the Member for Nottingham, East said, there has been controversy, and as I said earlier, the private equity industry has recognised that transparency and the lack of information about private equity are issues, which is why it asked Sir David Walker to produce voluntary best-practice guidelines. They apply to UK private equity firms and to companies owned by them. Unlike the Bill, they are aimed principally at the large public-to-private buy-out end of the market. That sector consists of a relatively small number of firms, but between them they have made the largest acquisitions.
	The guidelines set out principles to ensure that there is timely and effective communication with employees in particular at a time of strategic change as soon as confidentiality constraints are no longer applicable. They encourage the industry to ensure that employees are consulted as far as possible—which, as has been pointed out today, is best practice anyway—and to ensure that the company performs to the best of its key asset, which is of course the ability of the people who work for it.
	In his guidelines, Sir David considered the issue of why TUPE would not apply to private equity transactions. He explained:
	"These regulations apply to business transfers...and are designed to safeguard the rights and obligations of the employees, for example, by providing protection for employees from dismissal for the sole or principal reason of the transfer itself, whilst still allowing a dismissal for a reason connected with the transfer where that reason is...economic, technical or organisational...Where a business is acquired by means of a transfer of shares, the TUPE provisions do not apply since the contracts with the employees are maintained and remain with the entity that has been purchased and are subject to existing legislation applicable to the proper treatment of employees."
	That point was made by the hon. Member for Solihull (Lorely Burt). Sir David added, however:
	"Whilst the guidelines in this report do not seek to address the provisions of TUPE"—
	which, as he says, is rightly a matter of employment legislation—
	"they are explicitly attentive to the interests of employees, who are a major stakeholder in the company and the major contributor to a company's success."
	He called for an end to what has been perceived as excessive secrecy from employees by UK portfolio companies, and for a commitment by private equity firms to communicate and engage effectively with employees either directly or through their portfolio companies.
	The report recommends that a portfolio company should include as part of its audited annual report and accounts the following enhanced disclosures, which should focus on substance rather than form, and on the economic reality of a company or group rather than its legal structure. It states:
	"The report should include a substantive business review that contains all the material necessary for an understanding of the development, performance or position of the company's business, including the main trends and factors likely to affect the future development, performance and position of the company's business; and information for the company's employees, social and community issues, including information about any policies of the company in relation to those matters and the effectiveness of those policies. The financial review should cover risk management objectives and policies in the light of the principal financial risks and uncertainties facing the company, including those relating to leverage, with links to appropriate detail in the footnotes to the balance sheet and cash flow section of the financial statements."
	The Government believe that that is the right approach, and that it is in the interests of the private equity industry to provide information that will improve public understanding of the industry by demonstrating its contribution to the UK economy and employment.
	Most good employers recognise that companies are increasingly dependent on human creativity, and a company that does not care what its staff think does not get its staff to "buy into" its new market goals and aspirations, and is less likely to be successful than one that does so. I am delighted that for the second debate running on these issues we have heard about the excellent employment practices to be found in Swansea, which perhaps reflect such points.
	The concept of having a job for life is now unusual, and if people have to change jobs in the future it is important in order to succeed that they have both the hard skills in terms of qualifications and the soft skills in terms of experience. That is why the Government, and my right hon. Friend the Secretary of State for Innovation, Universities and Skills in particular, are investing so much in improving the skills of people at work to ensure that they can continue to learn and adapt throughout their working lives. That has replaced the old concept under which learning stops at the end of formal education or soon afterwards.
	I would like to deal in more detail with some of the specifics of the Bill. Clause 2 deals with individual employment rights where a transfer takes place. The TUPE regulations implement the acquired rights directive, which exists to protect employees where a business, part of a business or a service provision has been transferred, within the meaning of the regulations, from one employer to another. Employees need that protection because without it they would be forced at a time of uncertainty to negotiate a new contract with a new employer. Under a share transfer, however, the identity of the employer does not change, so it is not as though employees in that situation are without protection; they continue to enjoy the protection of the employment contracts that they have. The employee's contract of employment is still valid and cannot be altered without the agreement of both the employee and the employer. I cannot therefore see why such a new provision is needed or that it would afford employees any further protection where shares pass from one company to another.
	Clause 3 of the Bill deals with collective employment rights. The Bill's supporters fear that changes of ownership could lead to a new approach by an employer towards its recognised trade union, that collective agreements could be set aside, or that the union could be derecognised. Union derecognition in this country is relatively uncommon. There are tens of thousands of recognition arrangements in this country, but, according to the best estimates available, there have been very few derecognitions since 2000.
	My hon. Friend the Member for Nottingham, East will recall that this Government introduced a statutory procedure for union recognition, which came into force in 2000. That provides a workable system for a trade union to become recognised where a majority of the work force want it. Under the procedure, the Central Arbitration Committee can compel an employer to recognise a trade union, when the employees want it. The Central Arbitration Committee has awarded recognition in more than 180 cases. Those awards either followed an independent and secret ballot of the affected work force, which indicated a clear majority in favour of recognition, or were granted without a ballot because a majority of the affected work force were already members of the trade union in question.
	The procedure is also credited with stimulating an upturn in the number of voluntary recognitions that trade unions achieve. The procedure was designed to encourage parties to discuss issues and find a voluntary resolution. When the Government reviewed the statutory procedure a few years ago, it was found that the procedure had indeed had that effect. In fact, the number of voluntary recognitions dwarfs the number of statutory awards made by the Central Arbitration Committee. Some 900,000 employees are now covered by recognition arrangements as a direct or indirect result of the statutory procedure.

Andrew Miller: My hon. Friend will recall that those regulations replaced the regulations that were put in place by the Trade Union and Labour Relations (Amendment) Act 1976, which were subsequently abolished by the previous Conservative Government. I hope that he has noticed a shift in position today, with the Conservatives saying that they are satisfied with the present regulations.

Patrick McFadden: Conservative Members' comments that they were satisfied with the current regulations were reflected in the speech made by the hon. Member for Huntingdon (Mr. Djanogly).
	Our review of the procedure concluded that it was working in a reasonable manner, and that it had avoided the pitfalls and problems that beset attempts to devise statutory procedures in the past. The existence of the statutory recognition procedure has the effect of making someone think twice before derecognising a union that has been voluntarily recognised. Why should an employer derecognise, if the union could then restore recognition via the statutory procedure, if the majority of the work force wanted that to happen? At the very least, the decision to derecognise could draw the employer into the statutory procedure. I would argue that the existence of the statutory procedure already provides an adequate safeguard against decisions taken by an employer to derecognise a union that enjoys the support of a work force in a company.
	I fear that the Bill's treatment of union recognition goes beyond the provisions in the TUPE regulations. It does not merely provide the same protections as those that apply in TUPE. Let me explain that point. Under regulation 6 of the TUPE provisions, the new employer, the transferee, is tied to the recognition arrangement in just the same way as the old employer, the transferor—no more, and no less. That logic applies to a number of the provisions in TUPE. In other words, the new employer stands in the shoes of the old one and is tied to the recognition arrangement in exactly the same way. So the freedom of the old employer to derecognise the union, albeit in the context of the statutory procedures that I have outlined, applies equally to the new employer in a TUPE situation. Most recognitions are voluntary and can be terminated by either side within notice periods if they so wish. Under TUPE, the new employer can choose to derecognise the union within such a time scale; in practice, very few do, but TUPE would, in theory, allow them to do so.
	However, there is no cross-reference to regulation 6 of TUPE in the Bill; nor is there a cross-reference to regulation 5, which explicitly deals with the status of collective agreements. Instead, clause 3 refers to the issue of union recognition and other collective agreements by stating that they are subject to parts of regulation 4 of TUPE. Yet that regulation deals with individual contracts of employment between the employee and the employer, and does not cover collective agreements between the trade union and employer. The net effect is significantly to change the treatment of union recognition agreements and other collective agreements.
	For example, under clause 3, after an equity transfer, the employer could not derecognise the union for a reason unconnected with the transfer, unless he has an economic or technical reason to do so. That would provide a new legal underpinning to voluntary recognition deals that is different from TUPE and other statutory procedures—a limitation not found within the TUPE regulations. My hon. Friend the Member for Nottingham, East said several times that his intention was to treat equity transfers as if they were TUPE transfers, but on that point and one or two others, I fear that that principle is not quite reflected in the Bill.
	Clauses 4 and 5 deal with information and consultation rights in the event of an equity transfer. That is an important issue, so I quite understand why my hon. Friend emphasises it. Clause 4 defines the information and consultation rights, including their timing, the identity of the participants and the content of that dialogue; whereas clause 5 deals with the available remedies. These provisions are based on regulations 13, 14 and 15 of TUPE. Again, however, there are important provisions in those clauses that are not found in the regulations, which would have the effect of conferring a different set of rights under the Bill from those under TUPE.
	I appreciate the importance of proper consultation and a number of important consultation rights already exist. As I have already mentioned, perhaps the most important are in the Information and Consultation of Employees Regulations 2004. Where those rights are exercised, they would ensure that the business implications of new ownership are thoroughly discussed with the work force and their representatives. The 2004 regulations cover many of the circumstances with which clauses 4 and 5 are concerned.
	The 2004 regulations were seen generally as a very important step in our system of industrial relations. Indeed, John Monks, the former general secretary of the TUC, described them as
	"potentially the most significant piece of employment legislation ever to be introduced in the UK".
	They were based on an agreement reached between the TUC and the CBI. Those rights apply to employers with 100 or more employees and next month they will be extended to cover those with 50 or more. That means that they will cover a significant proportion of UK employees and a comfortable majority of those in organisations that are likely be subject to equity transfers of the kind that the Bill is concerned with.
	The 2004 regulations are flexible, allowing employers and employees to devise the consultative arrangements that best suit them. In our view, it is preferable for businesses and employees to decide their own arrangements voluntarily. The 2004 regulations provide scope, however, for employees to require the employer to introduce information and consultation arrangements where none exists. They also provide scope for employees to seek new systems where they consider that voluntary systems are insufficient.
	The object of the discussions is to reach an information and consultation agreement. Under the 2004 regulations, employers and employees are free to include in their agreement any aspect of the business's operation as a subject for consultation, including issues around business ownership. When parties fail to reach an information agreement, the employer is required to institute a fall-back set of standard consultative provisions. Under the 2004 regulations, that includes consultation on the recent and probable development of the economic situation; the current and anticipated employment levels, particularly if there is a threat to employment in the undertaking; and decisions likely to lead to substantial changes in work organisation or contractual relations.
	There is therefore an important opportunity in the 2004 regulations for employees, supported by their trade unions, to require an employer to discuss issues consequent upon equity transfers. Moreover, the regulations enable employees to create long-term information and consultation arrangements to help them influence decisions on a continuing basis. The Government recognise the importance of the regulations, which can be extremely valuable. We have kept a commitment to publicise them. We have alerted affected employers, arranged mailshots, sent e-mails, put information on the web to raise awareness and recently written to an estimated 40,000 organisations employing 50 to 99 employees, which will be brought within the scope of the regulations in April. ACAS has put together a programme of training events to help parties consider the effect of the regulations on them.
	Clauses 4 and 5, on consultation, go further than either the 2004 regulations or the TUPE arrangements. They would require a five-year forward look, with recourse to the High Court should that not happen. Again, that would not simply translate TUPE but go beyond it.
	The consultation rights available to employees do not stop at information and consultation regulations. Other important rights are available. We have heard in the debate about redundancies. When an employer proposes redundancies, other existing consultation rights come into play. If more than 20 redundancies are proposed in a 90-day period, the employer is required to consult for a minimum of 90 days with employees' representatives. They must discuss the reason for the redundancies as well as ways of minimising or avoiding them. If that discussion does not happen, each employee concerned may be entitled to a protective award, which constitutes a significant incentive for the employer to consult properly in accordance with the law.
	We have also heard that private equity companies can be large undertakings, operating across borders in several EU member states. That could bring them within the scope of the European works council directive, which is another information requirement. The UK is subject to it, and it led to our implementing the Transnational Information and Consultation of Employees Regulations 1999. Those regulations provide employees of European-level undertakings with ongoing access to information and consultation rights. They give employees of undertakings or groups of undertakings with at least 1,000 employees in total, and at least 150 employees in each of at least two member states, the right to be represented on a European works council. As has been said, a new owner might wish to change the terms of an occupational or stakeholder pension arrangement, in which case another consultation right comes into play—the 2006 occupational pension schemes regulations.
	My hon. Friend is right to stress the importance of information to employees. The purpose of my going through the rights available to employees in some detail is to show that we share his concern and have introduced a number of regulations to ensure that employees have recourse to information.

Christopher Chope: I appreciate the level of detail that the Minister has provided. Will he explain why the Government did not give a written response along those lines in answer to the request of the Select Committee on the Treasury last July? If the Government had given such a response, perhaps the Bill would never have come about.

Patrick McFadden: My understanding is that when the Government gave information to the Select Committee, they covered the position that I set out—the difference between an employer changing hands and a share transfer under TUPE.
	As I say, consultation rights are important, but the Bill goes beyond those rights, and beyond TUPE, on the issues of the five-year period after the transfer and recourse to the High Court. The Bill would compel the employer, the transferee and the transferor to provide information on a number of topics. Some of those requirements are reflected in other regulations such as the European works directive, but the situation as regards that directive is not quite the same. It is about ongoing consultation on the overall position of an enterprise, and not about providing a snapshot of the moment at which an equity transfer is taking place. The consultation process defined in clause 4(5) is more prescriptive and detailed than that in TUPE. It would take some time for the back-and-forth exchanges envisaged to take place; indeed, it could take many months, when there was a prospective transfer.
	For the reasons that I have set out, which have to do with share transfer and the respects in which the Bill goes beyond TUPE, the Government cannot support the Bill. However, I would not want my hon. Friend or other hon. Members to think that we were unconcerned about the issue of the exploitation of employees. We are alive to such issues on a number of fronts. We have put significant resources into enforcement of existing employee rights, and rightly so. To refer back to debate a couple of weeks ago, we have given agency workers new rights to withdraw from tied accommodation and transport, without any detriment to themselves. Our Employment Bill, which will improve rights in relation to the minimum wage, will have its parliamentary stages this Session.
	The TUPE regulations were reviewed and service contract transfers were included; that reflected our concern about the issues. We know that the TUPE provisions are necessary to protect a group of employees in a specific situation—not share transfer—and at a time of significant uncertainty. We are aware that Britain has benefited enormously over the past 10 years from a flexible business environment. The Bill's provisions go further than TUPE and would apply to a much wider group of companies, and we do not think that that is necessary, so we cannot support the Bill.
	However, I accept that my hon. Friend the Member for Nottingham, East genuinely wishes to ensure proper protection for people at work. He was kind enough to thank me for the positive, constructive dialogue that we have enjoyed on the issue in recent weeks, and I am certainly happy to maintain a dialogue with him on the subject. He knows that a voluntary code of practice, to which I referred, has been developed by private equity firms. I am pleased to tell him that my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform is happy to facilitate a round-table discussion on the issues involving my hon. Friend, representatives of private equity companies and trade unions. The hon. Member for Ribble Valley said that we should be discussing such issues with interested parties, and, as I say, my right hon. Friend the Secretary of State is happy to facilitate a round-table discussions on these issues.
	My hon. Friend will also be aware that the Treasury Committee looked into the matter of private equity and issued an interim report last year. My understanding is that the Committee intends to return to the issue at some point, and I am sure that it will be interested in receiving representations from my hon. Friend, the industry and external supporters of the Bill when it does so.
	For the reasons that I have set out, I do not believe that the Bill is the right vehicle for dealing with the issues that have been raised. However, in view of the dialogue with my hon. Friend that I have offered, including the round-table facility, I hope that he will consider withdrawing the Bill and pursuing the issues that he has raised today in the manner that I have suggested.

Christopher Chope: I congratulate the Minister on having given us almost one hour of good, robust common sense. I sympathise with the hon. Member for Nottingham, East (Mr. Heppell), but my regret is that he has been led up the garden path, perhaps not by the Minister or the Government, but certainly by Mr. Jack Dromey.
	You know, Mr. Deputy Speaker, how valuable and precious this Friday time is for private Members' Bills, and the hon. Gentleman, who had the good fortune to come fifth in the ballot with the chance to bring forward new legislation that he thought would make the world better for some if not for everyone, chose the Bill, submitted its long title and had every opportunity to discuss it with the Government, but only now, at the eleventh hour, are the Government saying, "Let's have a round-table discussion."
	I am sure that the hon. Gentleman will eagerly take up that option because it is the only morsel on the table for him to grab, but I want to challenge the Government as to why this mass of information on a technical subject, which had been requested by the Treasury Committee last July, was not provided sooner. The Committee pointed out, in paragraph 81 of its report, that several witnesses had said that TUPE applied if assets were bought from a company, but not if shares were bought, and therefore that TUPE did not apply to takeovers. On the other hand, witnesses from the British Private Equity and Venture Capital Association said that TUPE did apply to takeovers. The Committee said:
	"We ask the Government to clarify the application of TUPE to takeovers in time for the resumption of our inquiry."
	The Minister referred to the fact that he expects the inquiry to be resumed, but I would have expected, as I am sure would the hon. Member for Nottingham, East, that the information requested would have been supplied far in advance of today. If it had been, it would have helped the hon. Gentleman to have had a better-drafted Bill, which did not contain many provisions that even today he has said that he does not wish to apply and which, were the Bill to reach Committee, he would seek to withdraw.
	There is an issue here about process and the extent, or lack of it, to which the Government are prepared to take Back Benchers seriously. The Bill is supported by 12 of the Minister's right hon. and hon. Friends. In a sense, it does not affect Conservative Members because none of us is a supporter of the Bill, but those right hon. and hon. Gentlemen deserve better from the Government than to have had this long explanation at this late stage. They should have had it much earlier and then the Bill could have been amended, withdrawn or produced on a different basis. We will hear from the promoter of the Bill shortly, but it may be that, in retrospect, he will say, "Well, if I'd known how the complicated law was, I wouldn't have introduced this measure. Having been successful in the ballot, I would have introduced a completely different Bill."
	I shall not speak at great length, but I should like to put on record the fact that, when the Minister referred to what has been happening in the European Commission, he gave a long quote that included at the end of the sentence the expression, "at this stage". In other words, the Commission was saying that it did not want to introduce any change at this stage. I hope that the Minister will be alert to Euro-speak and to the fact that that phrase can well mean that a green or amber light is being given to people, particularly in the European trade union movement, to go on pressing for change notwithstanding the very strong arguments that the Minister has articulated against such changes.
	It is regrettable that, if the European Commission decided that it would not introduce any more legislation pursuant to the acquired rights directive, it did not just stop and say, "No, we don't see the case." Instead, they said, "We don't see the case at this stage." That introduces an element of doubt and uncertainty, which is undesirable and may well contribute in the end to the sclerosis of European economies. The European Commission almost suggests that, given half a chance, it would like to introduce more regulation and control. That sends out a very bad message.
	There is quite a lot of irony in what has happened today. Certainly, the relationship between the Leader of the House and Mr. Jack Dromey is well known to everyone. The fact that he has been mentioned as the person responsible for the Bill will cause quite a lot eyebrows to be raised outside the House. I do not know how he will deal with the issue at the dinner table this evening with his wife, but I am sure that quite a lot of us would like to be there to see what happens—if indeed the Leader of the House, who is a conscientious follower of the proceedings here, is aware of what has been happening today, as I am sure she must be.
	The hon. Member for Nottingham, East has appraised me of his intentions about the Bill for some considerable time; we have the privilege of serving together on the Administration Committee. All I can say is that I sympathise with him about the position that he finds himself in now, and I look forward to hearing what he has to say.

John Heppell: The hon. Member for Ribble Valley (Mr. Evans) talked about the unintended consequences of the Bill, and I have certainly already seen some of them. The private equity industry will never have had such glowing praise. Certainly, the standing of both the private equity industry and Mr. Jack Dromey has gone up considerably. I suspect that both their reputations have been enhanced, probably in very different quarters.
	I shall be brief; I see the hon. Member for South Suffolk (Mr. Yeo) sitting there, and I am sure that he would like to have a few moments to speak to his Bill.
	I hear what the Minister is saying, but I do not agree with everything that he said. At one stage when the hon. Member for Shipley (Philip Davies) was talking, I realised that he would have opposed anything that concerned regulation. I suspect that he does not support TUPE, as it applies now. However, having listened to the Minister read out all the things that people could do to be consulted and become involved when equity transfers take place—Bill after Bill, and occasion after occasion—I started to think that perhaps a bit too much regulation covers those transactions. The real point is that I could go through each thing that the Minister mentioned and explain why it is different from TUPE. He was saying what could be done, but none of those things equates to the same protection as people would receive under TUPE. I still feel the same as I did at the outset. I cannot see a logical reason why an equity transfer that causes distress or uncertainty for workers should not be treated in the same way as a general takeover in which TUPE applies. I do not see why one group of workers should not have the same rights as another group of workers.
	I thank my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) and my hon. Friend the Member for Stafford (Mr. Kidney) for their contributions. On a day on which I came in for a fair amount of criticism, it was nice to have someone on my side supporting me. I should thank my hon. Friend the Member for Ellesmere Port and Neston (Andrew Miller), too—I nearly missed out one of my star lieutenants. I thank the hon. Member for Ribble Valley (Mr. Evans), although I disagreed with him. He seemed to say all the right things about workers' protection and wanting to protect the vulnerable, but he came to a different conclusion, and said that the way to protect them was to give them no protection. However, he did so in a witty way, which I appreciated.
	The hon. Member for Solihull (Lorely Burt) expressed a balanced view. She tried to put the TUC view and the CBI view but, unfortunately, she fell on the wrong side of the fence. Listening to the hon. Member for Huntingdon (Mr. Djanogly) was like stepping back into the past and going back 30 years. It was the old, tired politics of them and us—the unions are all bad, and business is marvellous. I do not believe that there is any sensible person in the House who thinks that way any more. We all recognise that trade unions have a part to play in society and, at the same time, the Government have managed to create an economic situation that allows private investment companies to thrive. As a result, we have allowed the economy to grow. I am sure that there are no Government Members who want to kick business for the sake of kicking business, so I am sad that the debate descended to that level.
	I will end by saying two things. Like Opposition Members, I picked up on the Minister's comments on the European Commission. I wrote down what the Commission said, because I thought it was significant. It said that such a measure was not justified "at this stage." That brings me back to what I said at the beginning of our debate. Without Government support, the Bill is going nowhere, and I am realistic enough to accept that. To use the Commission's phrase, at this stage, the measure is not going anywhere.
	The fact that two sets of workers have different protections is unsustainable, and at some stage in future I think that something will be done to address that. I accept that the Bill is not the right vehicle to do so, but I welcome the opportunity that the Minister gave me to carry the issue a bit further and engage with the BVCA, other parties who are interested in such investment, trade unions and others to try to see whether there is a solution to the problem. I do not know exactly what it is, but if we have proper discussions, I am sure that we will find it and, in doing so, help investment companies in the private sector to participate in proper competition and, at the same time, protect their workers' rights. With that, I beg to ask leave to withdraw the motion.
	 Motion and Bill, by leave, withdrawn.

Energy Saving (Daylight) Bill

Order for Second Reading read.

Tim Yeo: I beg to move, That the Bill be now read a Second time.
	I am grateful to my hon. Friend the Member for Christchurch (Mr. Chope) and to the hon. Member for Nottingham, East (Mr. Heppell), who spoke on the previous Bill, for their restraint in allowing me a few minutes to put the case for the Energy Saving (Daylight) Bill for the second year running. I am delighted to have this chance to return to the House with the same private Member's Bill. I waited 24 years to get a place in the ballot and then, just as buses come along all together, I got it two years in a row. When I got it for the second time, I had absolutely no hesitation in choosing the same issue—in fact, it is the same Bill. I think that I was being environmentally responsible in doing so. We had to change the dates, but in every other respect it is an identical measure to the one that failed to get a Second Reading a year ago.
	In the past 12 months, I have been encouraged by the enormous number of supportive e-mails, letters and other communications that I have received. In that period, the groundswell of support for what I believe is a common-sense and overdue change has risen significantly. This is an idea whose time has clearly come.
	My Bill would put the clocks forward by one hour all the year round. We would have double British summer time in the summer and British summer time in the winter, which we can summarise as single-double summer time—SDST for short. The clocks would still change twice a year, as they do now, but there would be an extra hour's daylight in the afternoon or the early evening on every single day of the year. I cannot, I am afraid, produce more daylight during the day, which is a shame—I may work on that in the future—but for the time being it would be sufficient and very advantageous to move that daylight to the time of day when people are up and about rather than when they are asleep in bed. Of course, the change comes at the expense of losing an hour's daylight in the morning, but the benefits of more daylight in the afternoon are considerable.
	I am also aware of the current imbalance between the dates on which the clocks go back in October and when they go forward in March. They go back about seven weeks before the shortest day of the year and forward about 13 weeks after the shortest day. Several people have advocated bringing forward the date on which the clocks go forward. I would support that, but I think that they are, in a sense, accepting the principle behind my Bill. They are saying that it is better to have more daylight in the afternoon or early evening for more weeks of the year. I believe that they should follow the logic of that position and say, "Let's back the Bill and have it all the year round."

Angus MacNeil: I hear what the hon. Gentleman is saying—I am a fan of symmetry either side of midwinter—but I think that his logic is extreme. If he is bringing back the same Bill, he hit his head against a wall last year and is coming back this year to do it again. Had he taken on board the suggestions that were made on the Floor of the House last year, he might have had more support this year, but he comes back with the same Bill, and I fear the same result for him.

Tim Yeo: In my judgment, this is an idea whose time has come. Support for it is growing, the case for it is getting stronger, and the evidence is getting stronger. That is why I felt encouraged to bring back the same Bill.

Nigel Evans: It was good to wake up to the sound of my hon. Friend's voice this morning on the  Today programme. When Scotland was mentioned, he said that the Bill would allow Scotland to do what it likes, which is in clause 9. Scotland has special problems with his Bill but can do what it likes. I represent a north-western constituency that is only a few hours away from Scotland and where we have similar problems, if to a lesser extent, but there is no provision for us to have a different time zone. It would be ridiculous for the north-west to be on a different time zone from other parts of England, and just as ridiculous if Scotland were to have a different time zone from the rest of the UK.

Tim Yeo: My hon. Friend is a stout champion of his constituents' interests, but I do not accept that it is necessarily impossible for a country to have more than one time zone. Many countries do, and the people who live in them, even those who live on the borders, and on the cusp of the different time zones, seem to arrange their affairs in a perfectly satisfactory way. I would point out to him that a significant proportion of the UK population resides very close to the continental European time zone and frequently travels there. Many people in London would travel to the continent more frequently than they would even to my hon. Friend's constituency. The inconvenience suffered as a result of different time zones already affects an awful lot of people.

Tobias Ellwood: I congratulate my hon. Friend on bringing the Bill to our attention for a second time. Let me place on the record the fact that Conservative Front Benchers will not object to it and believe that the benefits in terms of tourism, energy reduction, CO2 emissions and lives saved make it worthy of further debate in Committee.
	On the issue of devolution, I would be more inclined to support the Bill if clauses 5, 6 and 7 were amended, so that we had one decision for the United Kingdom, rather than the matter being split up into the various devolved areas.

Tim Yeo: I am grateful to my hon. Friend for his support for the general principle of the Bill. I recall that during the debate last year, he intervened on my speech to express support from the point of view of his constituency. I recognise that the provision to give Scotland, Northern Ireland and Wales their own opt-outs in the Bill is somewhat controversial, but I believe that that aspect could be dealt with in Committee or perhaps on Report. I am not wedded to that provision, but to the principle of extending the afternoon lighter hours—that is the crucial thing for me in the Bill. The detail about whether different parts of the UK have an opt-out and the sort of remit given to the review panel are matters on which I will be quite flexible when the Bill gets to Committee, which I hope it will one day.

Kate Hoey: The hon. Gentleman talked about more daylight at the end of the day. Does he realise the effect that the Bill would have on rural communities, farmers—particularly in the north of England, Northern Ireland and Scotland—and postal workers, which is why the Communication Workers Union is opposed to it? Those up earlier in the morning would be at a disadvantage, even if there were some advantage at the end of the day.

Tim Yeo: There is indeed a group of workers who have to work in the mornings. It has interested me that the farming community is far less resistant to the idea than it was 20 years ago. In fact, my dialogue with the National Farmers Union suggests that it is almost in a position of neutrality on the Bill, compared with its opposition some time before. As for the postal workers' union, I wish my post arrived during the hours of darkness. The post that I receive in London—less than a mile from here—arrives at about 11 o'clock in the morning, so I do not think that the people who deliver it are going to be too badly affected by a change in the time.

Kate Hoey: Will the hon. Gentleman give way?

Tim Yeo: I cannot, I am sorry. I am running out of time and I want the Minister to have five minutes.
	There are four reasons why this change is so important. The first is the saving of lives on the roads, particularly young lives. When the Road Safety Bill was in Committee, the then roads Minister, the hon. Member for South Thanet (Dr. Ladyman) said:
	"I am prepared to accept that approximately 100 lives would be saved and 400 people killed or seriously injured would be spared that fate."—[ Official Report, Standing Committee A, 20 April 2006; c. 288.]
	That would happen simply through making this change.

Andrew Miller: Would the hon. Gentleman accept that it is already within the power of education authorities throughout the country to amend school times to address that point? Perhaps they should do so.

Tim Yeo: It is, but that would not achieve the other benefits that I am about to describe. The evidence on road safety is absolutely unambiguous, and I draw attention to the helpful leaflet that all hon. Members have now received from the Lighter Evenings campaign.

Christopher Chope: Will my hon. Friend give way?

Tim Yeo: No, I am sorry, I cannot give way again.
	The leaflet states that
	"accident rates rise after the clocks change in October when visibility...begins to worsen."
	When the previous experiment with single-double summer time was conducted, 2,500 deaths and serious injuries were avoided each year. For Parliament to refuse to take such a simple step puts on the conscience of every hon. Member the fact that during the lifetime of this Parliament, almost one person in every constituency will die unnecessarily. That is a deplorable state of affairs.
	The benefits of safer roads apply throughout the whole United Kingdom. The Transport Research Laboratory analysed the effects of the previous experiment, and found that the benefits get disproportionately greater as one goes further north. The biggest advantages come in those parts of the country that seem to find the idea least acceptable.
	The road safety grounds are sufficient ones on which to introduce the Bill, but a second and equally important advantage concerns energy use. We are more conscious today than we were 20 years ago of the importance of energy saving and cutting carbon emissions. A Cambridge university study showed that peaks in demand for electricity and energy consumption would be lower if this change were made, particularly in the winter. Carbon emissions would be cut by more than 1 million tonnes a year at no cost whatever to GDP.

Christopher Chope: Will my hon. Friend give way?

Tim Yeo: No, I am sorry, but I will not have time to let the Minister get to his feet.
	The Policy Studies Institute concluded that the change would reduce energy use and fuel bills, which was confirmed by the National Grid Company. A more recent study, which took place since I introduced my Bill last year, showed that the change would reduce the overall UK electricity price in winter by as much as 5 per cent. because early evening peaks in demand would be reduced, and the need for as much power to be kept on standby would be obviated. Those findings were also confirmed by the National Grid Company's modelling a year ago and would also address the matter of fuel poverty, which is rightly of great concern in many parts of the House.
	There are other, unquantifiable benefits for energy, such as people's greater willingness to use public transport or to walk or cycle in the hours of daylight. Only today I received an e-mail from someone who says that they often cycle through my constituency and would do so far more often if they could complete their journeys in daylight.
	The third reason the policy would be so advantageous is the boost that it would give to tourism, Britain's fifth largest industry. The change would lead to more inward visits, generating an extra £1 billion of inward revenue and thereby reducing the huge balance of payments deficit that currently exists in the tourism industry. It is estimated that a further £2 billion of spending would be generated in the leisure sector if people had the opportunity to visit historic sites and other attractions in the hours of daylight in the afternoon. The tourism industry is important to Britain. It has jobs that cannot be exported to the Asia-Pacific region. It is a 21st-century industry and we should give it as much help as we can.
	The fourth reason for the change is quality of life. Again, only this morning I received an e-mail that said:
	"I think this might be the single biggest thing that the government could do to improve my quality of life. Like most people who work full time, I have no time for leisure in the morning; I get up and get to work. My leisure time is when I get home from work, at about 7 pm. Yet at that time it's only light enough to go for a run, or potter in the garden, for about four months of the year. To extend that to perhaps six or seven months would mean...a huge amount to me"—
	and indeed to millions of other people.
	There would be health benefits, too. The opportunity for more physical recreation and outdoor activity would help to address the problem of obesity and its associated consequences, with great, unquantified savings to the national health service, including through avoiding lost production capacity.
	On energy use, I should also mention that the amount of carbon emissions saved is not insubstantial, but equivalent to half the current amount of electricity being generated from renewable sources. That would amount to 15 per cent. of the European Union's challenging 2020 target, which Britain has accepted, to increase the amount of electricity produced from renewable sources. There would be advantages to those, particularly in Scotland, who are concerned about the requirements for large numbers of wind farms. The Bill would be an easier way of achieving a reduction in carbon dioxide emissions.
	The opportunity that the Bill provides is enormous. There are many other benefits, including for the Olympic games and training opportunities, with perhaps a chance for the children inspired by the games to participate in outdoor activities under better conditions. People who do business in Europe currently find it difficult to get to morning meetings in countries on continental European time. That difficulty would be eradicated.
	Most measures that come before the House that save lives, cut carbon dioxide emissions, reduce energy bills, boost an important industry and improve the health and well-being of many citizens carry a price tag, in the form of higher taxes or higher prices for consumers, or involve the imposition of more regulations and red tape on business. My Bill does none of those things. It is all gain and no cost—a change that carries no penalty for anybody.
	My Bill is an idea whose time has come, and I am certain that within 10 years the change will have been made, but each year that Parliament delays making it, another 100 lives are needlessly lost on the roads and another 1.2 million tonnes of carbon dioxide are emitted. I hope that the Minister will use the seven minutes that remain to announce the Government's support for the measure. If he does not, he will have some searching questions to answer.
	If my hon. Friend the Member for Bournemouth, East (Mr. Ellwood), the Opposition spokesman, has the chance, I know that he will make it clear that the Conservative party now feels sympathetically towards the policy. I hope that that sympathy will be translated into a strong commitment at the next election. If we had had a full day's debate today, I am confident that many hon. Members would have expressed their support for the Bill. I hope that one of them will pick up the same measure next year, if the Government have not already done so.

Tobias Ellwood: Time is very much against us, and I congratulate my hon. Friend the Member for South Suffolk (Mr. Yeo) on getting in as many pertinent points as he could in the limited time. I shall do my best to end soon enough to allow the Minister to make at least a couple of comments if Labour Members will allow. I should like to clarify some of the points that have been raised. The Conservative party would like the Bill to progress to Committee; it has merits, mentioned today, that deserve further scrutiny.
	I should like to start with tourism, as I am the shadow tourism Minister. I am grateful for the feedback that I have received from all sorts of quarters, showing that the Bill would extend our tourist season. It would boost inbound tourism by more than £1 billion and overall spending in the UK leisure sector by more than £2 billion. The tourism industry needs a boost, and the Bill would certainly be welcome.

Angus MacNeil: Will the hon. Gentleman give way?

Shona McIsaac: rose—

Tobias Ellwood: I shall not give way; time is against me—I apologise.
	Road safety is one of the main reasons why 70 countries around the world have changed their time slots; they have done so to prevent accidents on the road.

Christopher Chope: Will my hon. Friend give way?

Tobias Ellwood: I will not.
	Some 82 per cent. of accidents involving schoolchildren happen in the evenings, and only 18 per cent. in the mornings. That fact alone shows what benefit would come from the time shift.
	The last experiment on this issue took place in 1969-70. Page 10 of the Library's useful guide on this shows that deaths and serious injuries in Scotland during 1970 went down by 107, and total casualties were reduced by 390. That was in Scotland alone; further down the UK, the numbers would increase.

Angus MacNeil: Will the hon. Gentleman give way?

Tobias Ellwood: I will not, I am afraid; time is against us.
	It has been mentioned that there would be knock-on savings of £200 million a year for the NHS, not to mention the lives that would be saved.
	Carbon emissions are very relevant these days, and that is why we need to consider the issue of daylight saving differently from how we did four years ago. The National Grid Company has commented that the peak in electricity demand would be lower, enabling the country to operate at a lower capacity at all times throughout the year. Furthermore, school activities would increase, more after-school functions could take place and kids could be helped away from the television.
	Crime would also reduce. Obviously, criminals enjoy darkness more than light. There would also be economic advantages: the City and the London assembly are both in favour. However, I stress that there are disadvantages—

Angus MacNeil: Will the hon. Gentleman give way on that point?

Tobias Ellwood: I will not give way, sir.
	The disadvantages must be given more scrutiny. We have not heard from many of the relevant voices, although we have heard from the farming industry—

Angus MacNeil: Will the hon. Gentleman give way?

Kate Hoey: rose—

Tobias Ellwood: I am not going to give way or be bullied, because there are only three minutes left. I should like us to have more time. I see from the barracking that people want to put their points, but there is simply not the time.
	Let us allow the Bill to move on to its next phase, give ourselves the opportunity to understand what is happening to our country and take advantage of the impact on tourism, energy, carbon emissions and the saving of lives across and up and down the nation. I encourage the House to move the Bill to its Committee stage.

Kate Hoey: I am pleased to have the opportunity to speak on the Bill; I had not expected that. In the very short time remaining, I should say that a number of Members from all parts of the United Kingdom want to make a contribution about the Bill, although they would not necessarily serve on the Committee if it were to progress to that stage. It is therefore important that the Bill does not go to Committee.
	I oppose the Bill. I am trying to remember when we last tried the experiment. I know that I was a lot younger then, but I cannot remember exactly when it was. In those days, exactly the same words were said by those who wanted the experiment. They said that it would really make a difference to people's quality of life and enjoyment. The reality was, as the promoter of the Bill knows, that it was not a marvellous change to people's lives and it did not bring about a huge change in people's quality of life. Indeed, a number of young children died in accidents during the morning, when people are not so awake or alert and are in more of a rush to get to work or school. Actually, the number of accidents rose.
	I have yet to see any statistics that prove to me that people—
	 It being half-past Two o'clock, the debate stood adjourned.
	 Debate to be resumed on Friday 14 March.

Remaining Private Members' Bills

copyright in sound recordings and performers' rights (term extension) bill

Order for Second Reading read.

Hon. Members: Object.
	 To be read a Second time on Friday 14 March.

WALSALL COUNCIL

Motion made, and Question proposed, That this House do now adjourn. —[Tony Cunningham.]

Bruce George: This is the second time that my hon. Friend the Member for Walsall, North (Mr. Winnick) and I have raised the issue of those who formerly worked for Walsall who were badly treated. It was raised previously in an Adjournment debate on 26 April 2007.
	If anything came of our concerns, we remain oblivious of it. I very much welcome this unexpected opportunity to speak again. There is a new Minister, and a further opportunity to express my deep concern—to put it incredibly mildly—about the lack of action by those who are responsible for ensuring the probity, efficiency, transparency and legality of municipal government in Walsall and elsewhere. I would include in that long list the Audit Commission; perhaps the district auditor, who has worked hard; the police; the Government office for the west midlands; Walsall council's internal audit committee, and—we should not forget—central Government. Many investigations and much activity have taken place, but how much positive action? Have all those organisations that are so entrusted, individually or collectively, achieved the objectives laid down in law and practice? I regret to say that, in my humble judgment, they have fallen short—far short—of the tasks that they have been set.
	As I said almost a year ago, I believe that those in the local authority have been guilty of many things, and have been surrounded by a ring of steel, perhaps on the basis of personal relationships, misplaced loyalty or vested interest—a need to protect the credibility of alleged improvements in the council. I must admit that, since special measures, there have been improvements, in some cases considerable ones, but at an unacceptable cost to the reputation of local government and the lives of those discredited, dumped and in some cases not even compensated. Is that to be set against the achievement of three stars?
	I raise the issue again and will continue to do so until justice is done and those who have besmirched municipal government are held properly to account and, if necessary, punished. So far, their actions appear to have been rewarded—in one particular case, handsomely so. I will not bore the Minister or the House by re-hashing events of the last four years, that period when Walsall was deservedly put into special measures by the Government, and put under the tutelage of—once again, diplomatically expressed—a highly centralised, idiosyncratic and deeply flawed leadership. However, I am more than prepared to give the Minister, and those whom he may designate, chapter and verse on what befell loyal employees of the local authority, and I am sure that others will do the same.
	There are three basic issues: first, the governance, good and bad, of Walsall council in recent years; secondly, how the many allegations were investigated or not investigated; and thirdly, the monstrous treatment of four, possibly five, loyal public servants who, in my view, have been treated shamefully.
	Most people in Walsall have heard of the tribulations that befell Peter Francis and the former chief superintendent of police, Dave Parish. Less well known was the appalling treatment of Liz McDonald, who was very sick. I knew there was at least one other who had experienced the heavy hand of the former leadership of the local authority and their loyal accomplices. His name, I later found out, was Mark Kemp. The reason he had disappeared from the radar screen was the sheer terror that he had experienced from unknown perpetrators, exacerbated by the usual suspects in the council to whom I have referred. If anything, his treatment was far worse than that of the others.
	I thought that this small group of abused employees comprised the "Walsall four", but another name has very recently been added to the list—that of Carl Teesdale, who has just lodged an application to the employment tribunal. I am sure that there are still others out there who have been on the receiving end of the long and totally unacceptable treatment meted out to those who dared to raise their voices, ostensibly under the protection of the Public Interest Disclosure Act 1998—AKA the Whistleblowing Act.
	A common thread runs through all four—possibly five—cases. These were all loyal, long-serving, hard-working, honest public officials, including Mr. Teesdale. All but Liz McDonald identified varying deficiencies and activities relating to flawed corporate governance, conspiracy to pervert the course of justice, malfeasance in public office, illegal payments, falsification of accounts and criminal deception—and that is for starters. For their courage and persistence, what did they get from their employers? Was it their sincere thanks? No, it was not. Was it a bonus or recommendation for a gong? No, it was not. Was it promotion? No, it was not. What they got was the following. They were ostracised, bullied, intimidated, marginalised, demoralised and pursued with relentless pressure, and virtually all of them succumbed and became ill. They were then unceremonially booted out.
	The common element to support the employment tribunal case was the Disability Discrimination Act 1995, of which the local authority was apparently oblivious although it is 10 years old. Fortunately, the former employees had the courage, resilience and persistence to fight back. For a long time they acted independently, as they were oblivious of what was happening to the others. They obtained good legal advice, belatedly in the case of Liz McDonald, who had been fired by fax. As I said in the last Adjournment debate, she found legal advice having discovered, late in the day, that her home insurance policy funded certain legal actions.
	Liz McDonald, Dave Parish and Peter Francis fortunately proceeded with their application to an employment tribunal. The council sought that well-known device procrastination, trying to weaken their resolve financially and emotionally. When it had nowhere further to run, the council, acting on strong legal advice, capitulated, on the day of the hearing or in some cases the day before. The cost to the council tax payer of the Peter Francis case was well over £1 million, excluding the cost of legal advice. In all the cases the enormous costs to the Walsall taxpayer could have been saved, and the lives of loyal public servants might not have been blighted or possibly damaged permanently. Why did that happen? It was because proper legal advice was either not given or taken, or totally ignored.
	I refer the House to a report by the district auditor, John Gregory. Although diplomatically presented, it was a damning indictment of the actions of the former chief executive. It was obvious that she would lose, as her lawyers had told her. Mr. Gregory identified many failures. The former chief executive clearly did not take the advice that she was given. She made decisions on the Francis case without the requisite legal knowledge of, in particular, disability discrimination. She dominated and thwarted the council's preparation of its weak case, which became weaker. In the words of Mr. Gregory,
	"the former Chief Executive took clear personal control of matters relating to Mr Francis from the beginning of September 2004".
	I will not list all the criticisms. I must not lose sight of the issues raised by Peter Francis, Dave Parish, Liz McDonald and Mark Kemp which led to their Kafkaesque treatment. It was fraud and theft pure and simple in some cases, together with a large dollop of gross inefficiency, malevolence and maladministration.
	I believe that in the early days of the neighbourhood renewal fund, which was meant to alleviate deprivation, the instructions or advice from the Office of the Deputy Prime Minister were vague. That was eagerly leapt upon by a grossly inefficient Walsall bureaucracy, which was analysed and exposed by the district auditor. However, old habits die hard. I am convinced by the evidence that is available that much of the money that should have targeted deprivation was spent—with the flimsiest excuses—on closed-circuit television, wheelie bins, wardens, education facilities from Serco, and other beneficiaries as yet undisclosed. This large sum of money represented a nice little earner for some and a pot of gold to be raided by high officials to fill any gaps in mainstream funding—or even worse. NRF money had also been used to support policing of the night-time economy, which seems rather bizarre.
	On the malfeasance and crime, I wish to mention an e-mail of 2004; I know the author, but I shall not name him. He said in response to the identification of an £800,000 underspend on the NRF:
	"I am getting slightly nervous about the £800k of NRF that wasn't allocated to projects....What I also need to know is where it is sitting in the accounts at present and how we can ensure that the DA (District Audit/District commission) don't pick up whatever we decide to do with it."
	In an e-mail of 10 June 2004 regarding the unauthorised transfer of £100,000 to social services he says:
	"This e-mail will self destruct if an auditor comes within ten feet of it".
	He may have found that pretty funny, but I find it corrupt.
	The council's self-defence has been miserable; it has lost time and again. It has deceived. It has had spurious inquiries—I could name them all—that came to nothing.
	The Mark Kemp case was in many respects the worst of all. He has had no legal representation, although he has received pro bono advice from someone—a heroine, in my view—who was familiar with the other cases. He came to Walsall in 2003 to work for the establishment team of the education department. It was not long before he was introduced to what appears to have been a long-standing, unofficial working practice of bungs between contractors and some employees of the council. He declined to participate, was ostracised, was assaulted five times—once in the council house—and was sent a dead, decaying rat through the post. Someone called at his house and threatened his 75-year-old mother's life. He was savagely beaten in his garden by two assailants. He was dumped in a pond in the back of his garden and could have drowned. He was then fired on spurious grounds. He did not surface because he was told, "Go to a tribunal and you're a dead man."
	I am not blaming the council leadership, but corruption took place in the local authority at that time and went either unnoticed or unidentified. The council is in denial despite the regular beatings it has received. I have been told that what has happened is historical, but some of it happened two years ago, so that is nonsense.
	The epicentre of all of this was a coterie of senior staff directed by the former chief executive. Many people around the country know exactly where the bodies are buried. Many went along with the tide, feeling the consequences of working within an organisation dominated in part, when threatened, by a culture of fear and intimidation. I hope that the silent ones will have had their consciences pricked by the revelations of what happened and will come forward. Perhaps omelettes cannot be made without breaking eggs, but what happened is a disgrace and should be properly investigated.
	The police have made inquiries, but nothing, apparently, has come of them. There have been internal inquiries, and people have been hired to carry out an inquiry. I hope that the Minister does not accept that any of them got anywhere near the truth. I think that a lot of people should be investigated, and I hope that they will be.
	I am sure that advisers will say that despite our long experience as MPs we Walsall Members are being paranoid, but the complaints of those who have been appallingly treated and the allegations of serious corruption should be investigated properly, not by friends of anyone, or by an institution that has a vested interest in maintaining that great success has been achieved in the past four or five years—which is a fiction in some cases—since the Government sent in the dogs. It should be seriously investigated, perhaps through more than one inquiry, by an independent person or persons reporting to the Minister. Only then will the allegations of appalling treatment meted out to decent people be dealt with, and only then will we receive the just expression of what should be said: that the council proceeded badly and those responsible should be identified and, if necessary, punished.

David Winnick: I am very pleased that my right hon. Friend the Member for Walsall, South (Mr. George) has secured this debate. As he said, I had an Adjournment debate on 26 April last year regarding Peter Francis, in which my right hon. Friend and I dealt with the events that had occurred on the council. What occurred in Mr. Peter Francis's case was unhappy to say the least. It was shabby, and a discredit to the local authority. It was right that he was awarded some £650,000 by the employment tribunal for unfair dismissal and disability discrimination. There is absolutely no justification whatever for what happened to Mr. Peter Francis. Of course, the council gave in on the very day on which the tribunal was due to meet, as my right hon. Friend said. It is also right that attention should be given to the other people involved, as has happened today.
	There was a great deal of controversy—it lay, to a great extent, with the case of Peter Francis—surrounding the way in which the neighbourhood renewal fund was being applied. I know that the fund has now been discontinued, but when it was in operation, it was meant to help the more disadvantaged and deprived parts of the borough. However, in Walsall, it was spread much more widely. It was not used as it should have been used, and that is largely the reason behind the controversy over Peter Francis, and behind the shabby and unacceptable manner in which he was treated and dismissed.
	I do not want to deal again with the case of the chief executive. I am sure that my right hon. Friend and I agree that we have every confidence in the new chief executive, and the council is now demonstrating some very welcome new departures. However, it is not only the former chief executive who should be criticised; it is also the political control of the council and the way in which the council operated at that time. There were certain periods during which the council gave the impression of being more like an authoritarian state than an English local authority. Those were very unhappy times, and I hope that they will never be repeated, whoever controls the council.
	As I have said, those events were a discredit to the local authority, and they certainly did not reflect well on those who were responsible for running the council. I hope that there will now be new opportunities for the council to act in a very different way. I shall welcome the intervention of the Minister on all these matters, which are causing such concern in the borough.

John Healey: I congratulate my right hon. Friend the Member for Walsall, South (Mr. George) on securing this debate, and my hon. Friend the Member for Walsall, North (Mr. Winnick) on his contribution. I thank them for the serious way in which they have pursued what I accept are serious concerns, and I recognise the determination with which they have done so for some time.
	As my right hon. Friend will know, the cases of those to whom he referred in his speech as the Walsall four have all been drawn to a conclusion through various processes. In one instance, a case has been withdrawn. There have also been compromise agreements, and settlements in relation to the employment tribunal. I had not heard of Mr. Teesdale before this afternoon, but if my right hon. Friend will give me further details of that case, I should be interested to see them.
	I made the point about the four cases because the relationship between a local authority and a member of staff is fundamental a matter relating to that officer's contract of employment with the authority. Legally speaking, Ministers have no remit to intervene in the day-to-day management responsibilities of a local authority. There is also established provision, which Mr. Francis used, under which individuals whose treatment under contract falls below the level at which it should be can take such cases to an employment tribunal—and, ultimately, perhaps to the courts.
	I have pursued these concerns for some time and I have checked back in preparation for this afternoon's Adjournment debate. Correspondence has been frequent and discussions with Ministers have already taken place. I believe that there was a meeting in November 2006 with my predecessor, now the Minister for the Environment. Furthermore, as the then Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Basildon (Angela E. Smith), said in response to the debate of my hon. Friend the Member for Walsall, North on 26 April last year, she was ready to offer another meeting, once the reports discussed during that debate had been received.
	At that time, the report of the district auditor was particularly awaited. As the then Under-Secretary said, it was the most appropriate way of uncovering and examining the relevant issues of public concern and then ensuring that the council took any necessary remedial action. Let me say to my right hon. Friend the Member for Walsall, South that that report was carried out, as he knows, by the district auditor. That person, as my right hon. Friend acknowledged, does not have a vested interest and has, indeed, a statutory role to play, carrying out his function under part 3 of the code of audit practice. In my experience, our district auditors do their job under statute with great diligence.
	The report has now been published—it was issued in September last year—and the main conclusion was that in the particular case of Mr. Francis,
	"some of the council's arrangements for managing its staff and for complying with legislation clearly did not operate effectively. This was because those procedures were not always applied, but there were also weaknesses in the some of the arrangements which were in place."
	The auditor further stated that his
	"findings do not, however, mean that there were widespread failures in the Council's governance arrangements, which were continuing to improve throughout this period".
	A further linked inquiry was being undertaken at the time. It was an independent inquiry, although set up at the instigation of Walsall council. It was designed to complement the district auditor's work and laid greater emphasis on some of the systems that the council had in place—another area of concern for my right hon. Friend the Member for Walsall, South. That inquiry was undertaken by the former chief executive of Shrewsbury and Atcham borough council, Douglas Bradbury. When he had concluded, a decision was taken, because of the linked areas of inquiry with the district auditor's work, that both reports should be published together, which they were in September.
	Given the shortage of time, I will not go into the detail of the issues that Mr. Bradbury's report covered. Suffice it to say that it concluded that although the council had the necessary disciplinary agreements and whistleblowing procedures in place, they were not always correctly or consistently followed. Both reports highlighted, as did my right hon. Friend, an insufficient awareness across the council of the nature of the Disability Discrimination Act 2005.
	Let me try to spell out briefly, in a way that I hope will provide both my right hon. Friend the Member for Walsall, South and my hon. Friend the Member for Walsall, North some reassurance, the actions that have followed the recommendations of these two reports. Both were sent to all members of the council. Both were made public on 10 September last year and debated in public at a full council meeting. The council also put in place a detailed plan to deal with the concerns that had been identified. That plan was shared with the Audit Commission and approved by the council towards the end of September.
	Importantly, the council set out and is now pursuing clear arrangements to ensure that action in the plan becomes action in practice, and so that all the actions for improvement are given priority. Each has a named individual responsible for its implementation, and the relevant cabinet portfolio holder is also identified. Ultimately, the chief executive is the implementation manager responsible for ensuring that the action is pursued, and the council's audit committee has oversight of it. My right hon. Friend and my hon. Friend can therefore trace it through and be clear about who is accountable for any progress, or lack of progress.
	When my right hon. Friend and my hon. Friend raised the matter last year, the district auditor had not reported. My hon. Friend the Member for Basildon, the then Under-Secretary, said that she would meet them once it had been published. I extend them a similar invitation today. I understand that my right hon. Friend has previously met the district auditor, but not since—

Bruce George: I have not.

John Healey: Then I am misinformed. If he has not, but wishes to do so to discuss the content of the auditor's report and the weaknesses that he believes it contains, and if he and my hon. Friend the Member for Walsall, North, would find it useful, I will facilitate and attend such a meeting. I am also willing to approach Mr. Bradbury, if my right hon. Friend and my hon. Friend wish me to do so. I can ask whether he, too, would be prepared to meet them to explain the work that he undertook in his inquiry and the recommendations and findings in his report, and deal with any questions or concerns that they have about the content and conduct of the inquiry.

Bruce George: I am sorry to intervene, because I have the greatest respect for the Minister, but what he has said—or what his civil servants have said—is a bit like taking a penalty shot and hitting something at a 45° angle. It is all true, but it completely misses the point. I shall willingly accept his invitation, but I would love to bring along Peter Francis, Liz McDonald, Mark Kemp and David Parish. Maybe they could give a version that is markedly different from the reports that were commissioned. I ask my hon. Friend not to simply close his eyes and have a nice little meeting. I hope that he will examine the matter seriously, because it is about the integrity of British local government, which has been gravely damaged by what happened in my constituency and that of my hon. Friend the Member for Walsall, North.

John Healey: The integrity and propriety of British local government is the remit and role of the district auditor; that is an element of what he is meant to consider. My right hon. Friend has a lot of experience in the House, and he will understand that individual employment contract matters are not something that I, as a Minister, can properly look into in detail. I started my contribution by saying that there are established procedures through which that can be done, and all four individuals whom he mentioned have pursued, in different ways, the legal avenues available to them.
	Let me finish by saying that in the last debate on the subject, mention was made of an ongoing police investigation and the involvement of the Crown Prosecution Service. I understand that that investigation was concluded shortly after the debate last April, and the police determined that no further action was necessary. As my right hon. Friend the Member for Walsall, South said, there have been real achievements in Walsall since 2002. It would be wrong to ignore them, but clearly he and my hon. Friend the Member for Walsall, North have questions resulting from the two inquiries and two reports. As I have said, if they wish to pursue those questions with and through me, I am happy for them to do so.
	 Question put and agreed to.
	 Adjourned accordingly at  Three o'clock .